Tuesday, 20 May 2008

Yahoo Tells Ichan to Take a Hike, Says its Board More Qualified

Yahoo Inc. has defended itself against Carl Inchan, who this week announced that he plans to launch a proxy battle that will push both Yahoo and Microsoft back into the boardroom to revive takeover talks that was dropped earlier this month...

Yahoo Inc. has defended itself against Carl Inchan, who this week announced that he plans to launch a proxy battle that will push both Yahoo and Microsoft back into the boardroom to revive takeover talks that was dropped earlier this month.

Ichan, who reportedly owns the equivalent of 59 million Yahoo shares, says he plans to do this by nominating a slate of ten directors to the Yahoo board of directors at the 2008 annual meeting of stockholders.

In a letter to Ichan, which was found on Yahoo’s website, the Internet giant implied that Ichan’s knowledge on the Microsoft proposal reflects a “significant misunderstanding” and that it does not believe it is in the best interest of the company to allow Ichan to “hand pick” nominees to take control for the express purpose of trying to force a sale of the company to Microsoft, who has also publicly stated that it no longer has any designs on acquiring Yahoo and has duly moved on.

“A fair-minded review of the factual record leads to one conclusion: that Yahoo!'s ten-member board, comprised of nine independent directors along with Yahoo! CEO Jerry Yang, remains the best and most qualified group to maximize value for all Yahoo! stockholders,” Yahoo Chairman Roy Bostock said in the letter to Icahn.

Ichan is famous for waging proxy battles, compelling companies to change their strategies. Most recently he worked on a settlement with Motorola.

Computer behemoth, Microsoft, has been fiercely pursuing Yahoo for some months now but gave up its bid, valued at USD 33 per share, on May 3 after it refused to succumb to Yahoo’s asking price of USD 37 per share.

Bostock went on to write: “Our business is performing well as evidenced by our first quarter results. As we have publicly stated, our board continues to actively and expeditiously explore strategic alternatives to maximize stockholder value. None of the alternatives we are considering would preclude us from entering into a transaction with Microsoft or any other party.”