Originally published July 15, 2008 at 12:00 AM | Page modified July 15, 2008 at 9:56 AM
Ichan: Yahoo board will regret rejecting bid from Microsoft
Yahoo directors made a "grave mistake" in rejecting Microsoft's latest advances, billionaire investor Carl Icahn said as he pressed shareholders to oust the Internet company's board.
Bloomberg News
Yahoo directors made a "grave mistake" in rejecting Microsoft's latest advances, billionaire investor Carl Icahn said as he pressed shareholders to oust the Internet company's board.
Yahoo rejected a breakup proposal from Icahn and Microsoft over the weekend, saying it would be "ludicrous" to sell the search business to Microsoft and leave the rest of the company in Icahn's hands. Icahn on Monday accused Yahoo of distorting the terms of the offer, telling investors not to be "fooled."
Both sides are preparing ammunition for the Aug. 1 shareholder vote to decide who controls the board. Compromise between Icahn and Chief Executive Officer Jerry Yang is probably impossible now, and investors may vote to throw out the current team, analyst Jeffrey Lindsay said.
"Investors have made their minds up," said Lindsay, at Sanford C. Bernstein & Co. in New York. Yahoo doesn't have "any realistic alternative" to boost the stock as high as a buyout from Microsoft would have, he said.
The stock of Sunnyvale, Calif.-based Yahoo dropped $1, or 4.2 percent, to $22.57 Monday. Microsoft' stock fell 10 cents to $25.15.
Microsoft disputed Yahoo's account of the talks, saying it only asked for a quick response on whether the terms of the offer could form a foundation for negotiations.
Yahoo spokeswoman Tracy Schmaler and Icahn representative Sue Gordon didn't return phone messages seeking comment.
Yahoo would get at least $2.3 billion in shared revenue from the search assets annually over five years. The Microsoft offer would have generated about $300 million a year in cash, Yahoo said. That compares with the maximum of $450 million annually that Yahoo expects to get from its search advertising partnership with Google, owner of the most popular Web search engine.
"I actually for the first time feel that the Yahoo board was on strong grounds for rejecting this offer the way it did," said Larry Haverty, an associate portfolio manager for Gamco Investors in Rye, N.Y. "The only thing that really makes sense here is for Microsoft to buy the whole company."
The deal would have helped Yahoo cut research costs by billions of dollars, Icahn said. He disputed Yahoo's claim that directors received only 24 hours to decide on the deal, saying they would have had more time had they agreed to delay the Aug. 1 meeting. Icahn and Microsoft also were willing to discuss keeping some board members, he said, countering Yahoo's claim that the deal was conditioned on replacing the board.
"I have yet to see a company distort, omit and twist events and facts in the manner that Yahoo has done," Icahn said in a statement. He filed a definitive proxy statement Monday, seeking to replace Yahoo's nine-member board with his own nominees, including himself.
Copyright © 2008 The Seattle Times Company
Rainier Pacific Financial calls rescue 'unlikely'
Clearwire gets $1.5B in financing from Sprint, others
NEW - 01:22 PM
Home prices fall nationwide, and in Seattle, in 3Q
UPDATE - 01:47 PM
Housing plan reaches 1 in 5 borrowers
NEW - 01:36 PM
Alaska Air Group believes smaller is better, CEO tells investors

Ken Auletta talks about "Googled"
Ken Auletta talks about Google with Brier Dudley at the Seattle Central Library.
nwjobs

Post a comment

Michelle Goodman blogs about work/life balance.
How to tell your office you're gravely ill
Post a comment
nwautos

Choosing a new sedan? Weigh the impact of your choice on your wallet and on the planet.
Post a comment
- 'Missing' SeaTac man found with new name, in new state
- Police: DNA from officer's slaying matches suspect
- Lt. governor's son shot by co-worker in Kent; gunman then shot self
- DNA, ballistics tie man to cop killing, police say
- McGinn next Seattle mayor; Mallahan concedes as vote gap widens
- Prosecutors consider charges against suspect in police shooting
- Three more fires ignite in Greenwood
- Trucker dies as big-rig plummets off SF bridge
- Huskies are finding talent in Tacoma
- Steve Kelley | Hasselbeck gives Seahawks' sagging season a stay of execution
- Prosecutors prepare charges against suspect in police shooting
264 - King County OKs 'don't ask' law on immigration
233 - Pelosi tours Seattle's Swedish after health-care vote
210 - McGinn more than doubles his lead over Mallahan
193 - Resolute Fort Hood soldiers ready for return
131 - Obama pressed into role as national healer
114 - Time to bring Ken Griffey Jr. back in 2010
99 - 'Missing' SeaTac man found with new name, in new state
97 - Josh Smith picks UCLA
85 - DNA, ballistics tie man to cop killing, police say
84
- For 80-year-old Maple Valley man, hoops aren't just a dream
- Plans call for Triangle to become West Seattle gateway
- 'Missing' SeaTac man found with new name, in new state
- Three more fires ignite in Greenwood
- Silver Lake restaurant destroyed by fire
- House Speaker Nancy Pelosi tours Seattle's Swedish after health-care vote
- Pakistani-American cafe, bar owner on verge of being Granite Falls mayor
- All You Can Eat | Fruit flies: thrill to the kill
- McGinn next Seattle mayor; Mallahan concedes as vote gap widens
- Rainier Pacific Financial calls rescue 'unlikely'





