The drama between Microsoft and Yahoo has been taking place—in a very public way—for almost half a year now, and today Yahoo rachetted up the tension even further. In an open letter to shareholders, the company urged investors to back Yahoo’s current board of directors and reject a takeover attempt from dissatisfied billionaire investor Carl Icahn, who wants to appoint his own board and lay Yahoo for sale on Microsoft’s doorstep. And Yahoo’s letter walks right up to the line, insinuating Icahn is all but lying to get Yahoo investors to back his plans.
“The recently-formed Carl Icahn-Microsoft alliance continues to make misleading statements about their plans for Yahoo,” the letter reads in part. “Your Board of Directors believes strongly that the Icahn-Microsoft agenda—as presented to us jointly last week—will destroy stockholder value at Yahoo!, serving only their very narrow special interests, clearly not your interests.”
Yahoo goes on to describe Icahn as a “well-known corporate agitator” whose involvement with Yahoo has been “brief” and is guided only by his interest in seeing a short-term gain on his investment. Yahoo further says Icahn’s proposed replacement board slate lacks the knowledge to negotiate and manage a protracted reorganization of a high-tech company in a fast-changing business environment, or the expertise to lead Yahoo during the estimated one-year period it would take for a Microsoft takeover to gain regulatory approval.
Had enough? Yahoo isn’t done yet. Yahoo’s current leadership questions whether Icahn can trust Microsoft as a business partner, owing to the company’s “flip-flops and inconsistencies” which—to Yahoo’s current management anyway—indicate the company may never have been serious about buying Yahoo. But just to make things clear, Yahoo says it is still willing to sell out to Microsoft…for no less than $33 per share. Yahoo says it’s also willing to talk about selling its Internet search business “as long as it provides real value to our stockholders and resolves the substantial execution and operational risks associated with the separation of our search and display businesses.”
Yahoo’s shareholder meeting—and, it looks like, the major showdown with Carl Icahn—is scheduled for August 1.
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