No Deal! Yahoo Rejects Icahn-Microsoft Offer No. Two
Date : 14 Jul 2008 Category : Technology
NewsFactor NetworkOn Saturday, Yahoo rejected Icahn's proposal for Microsoft to buy Yahoo's search business for a guaranteed $2.3 billion per year over a five-year period. Yahoo recently agreed to an $800 million nonexclusive deal deal with Google for search ads, and Microsoft and Icahn wanted an exclusive contract.
The proposal also would have removed Yahoo's board of directors, including CEO Jerry Yang, and replaced them with Icahn's dissident slate.
On To a Proxy Fight
The situation heated up last week when Icahn, in an open letter to shareholders, revealed he was talking with Microsoft executives. Microsoft had expressed frustration with the process and said it could no longer negotiate directly with Yahoo.
Icahn now wants shareholders to dissolve the current Yahoo board and create one more amenable to a Microsoft deal at the company's annual meeting Aug. 1. The proposal rejected by Yahoo would also have given Icahn, which owns five percent of Yahoo, control of the remainder of Yahoo's business, including e-mail, news and social networking.
Yang charged last week that Microsoft was out to destabilize Yahoo. He also indicated that an Icahn-led board would not be in the best interests of Yahoo.
Shoot-Out in San Jose
Shareholders can expect increased attention before the annual meeting at the Freemont Hotel in San Jose, Calif., as Yang and Icahn promote their choices for directors.
Icahn's slate of directors is led by Mark Cuban, a former owner of Broadcast.com. The first priority for an Icahn-led board would be to rescind a poison pill that would allow Yahoo to release new shares of stock at a discount if a hostile party like Microsoft...