Icahn threat to Yahoo CEO
The position of Yahoo co-founder and CEO Jerry Yang is under threat, with billionaire investor Carl Icahn calling for changes to the company’s board.
Icahn, who leads a group of shareholders dissatisfied at the way Yahoo’s management handled Microsoft’s recent takeover attempt, has proposed a new slate of board members which will be voted on at the Annual Shareholders Meeting on August 1.
Speaking to the Wall Street Journal, Icahn expressed his amazement at the lengths the Yahoo board had gone to preserve the company’s indepedence.
“Nobody ever understood the magnitude of what Yahoo did to do avoid making a deal,” said Icahn, adding “How can Yahoo keep saying they’re willing to negotiate and sell the company on the one hand, while at the same time they’re completely sabotaging the process without telling anyone?”
Icahn and several of Yahoo’s major shareholders have gone on record to say that the company should have worked harder at securing a deal with Microsoft, and that the improved $47.5 billion offer was close to a fair valuation of Yahoo’s assets.
According to Icahn, not only have Yahoo’s shareholders lost confidence in the board, Microsoft executives are also likely to have little trust in the current Yahoo management - potentially scuppering a return to the negotiating table.
“In my opinion, you might have to get rid of Jerry [Yang] and part of the board to bring back Microsoft.” stated Icahn.
To illustrate Yahoo’s attitude to a Microsoft takeover, Icahn cited US court documents made public this week that revealed a press release was drafted by Yahoo which rejected Microsoft’s offer 3 months before it was actually made.
Additionally, the board approved an expensive employee severance scheme that would pay up to 24 months salary plus benefits to staff leaving or fired “without cause” after a takeover, further complicating any merger deal.
In a statement issued yesterday, Yahoo’s board rejected Icahn’s claims that it has been prejudiced in its handling of the takeover attempt, stessing it would “consider any proposal by Microsoft that was in the best interests of its shareholders”.
“Yahoo has engaged in extensive discussions with Microsoft over the last several months, culminating in Microsoft’s decision not to pursue an acquisition of Yahoo. Mr Icahn’s assertions ignore this clear factual record,” the statement concluded.
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