Saturday, November 21st, 2009

Yahoo ‘Completely Botched’ Microsoft Merger

May 15th, 2008 | By Mike Caggeso | Category: Stock Market Investing

Carl Icahn is adding to his reputation as a boardroom bully. In a letter to Yahoo Inc. (YHOO) Chairman Roy Bostock, the billionaire investor threatened to seek control of the board and resuscitate takeover talks with Microsoft Corp. (MSFT).

Two weeks ago, Yahoo Chairman of the Board and co-founder Jerry Yang rebuffed Microsoft’ $47.5 billion (or $33 a share) bid, sending shares down $4.43 (or 15%) to $24.24. That of course didn’t bode well for Icahn, who said he owns 59 million Yahoo shares.

“The board of directors of Yahoo has acted irrationally and lost the faith of shareholders and Microsoft,” Icahn said in his letter. “I sincerely hope you heed the wishes of your shareholders and move expeditiously to negotiate a merger with Microsoft, thereby making a proxy fight unnecessary.”

If necessary, Icahn’ strategy is to seek antitrust clearance from the Federal Trade Commission to purchase up to $2.5 billion worth of shares – about a 6% stake. Also, with all of Yahoo’ 10 board members up for re-election on July 3, Icahn will move to nominate his own list of board candidates, one being Mark Cuban.

Reviving talks with Microsoft won’t be easy, as rhetoric increasingly intensified between Yang and Microsoft CEO Steve Ballmer during takeover negotiations.

But if anyone has the experience and moxie to push talks further, it’ Icahn, who has used his clout to push action at struggling mobile phone pioneer Motorola Inc. (MOT) and drugmaker ImClone Systems Inc. (IMCL).

Most recently, Icahn has been at the forefront of Blockbuster Inc.’ (BBI) up-to $1.35 billion bid for Circuit City Stores Inc. (CC). If that deal falls through, Icahn said he would acquire the struggling electronics retailer.

In his letter to Yahoo, Icahn said the board “completely botched” a successful merger with Microsoft and that he is acting on shareholders’ behalf to establish a new board.

Icahn also penciled his name in as one of the nominees for Yahoo’ board.
“I think he’ playing his cards pretty smart here,” Troy Mastin, an analyst at William Blair & Co., told Bloomberg Television. “I wouldn’t be surprised to see Microsoft and Yahoo together in the next few months.”

Source: Yahoo ‘Completely Botched’ Microsoft Merger 


AdvertisementUse Your Home Computer to Turn $8,000 into $80,000 Every Year…

Simply by "Repatriating" the World's Hottest Currencies!

Peter Schiff – outspoken analyst and president of Euro Pacific Capital – has found a wildly profitable "loophole" in the global currency markets. It allows you to easily "repatriate" the hottest foreign currencies into your personal bank account… automatically. When the transactions hit, you can make money. It's that simple.

For details on how you can use Schiff's technique to turn $8,000 into $80,000 every year, like clockwork, please CLICK HERE now.



More on this topic (What's this?) Read more on Microsoft, Yahoo! at Wikinvest
Tags: , , , , , , , , , , , , , , ,

By Mike Caggeso

Related Articles



About the Author

Mike Caggeso is an Associate Editor Money Morning.

See All Posts by This Author



Money Morning is the leading source of investment research on the global markets. Its free daily service provides news, research, investment opportunities and insights on international investing -- most of it well before it appears in the mainstream financial media.

See All Posts from This Publication

Leave Comment