San Francisco
Billionaire investor Carl Icahn on Thursday launched a bid to take control of Yahoo Inc.'s board of directors, which he called "irresponsible," in an effort to force the Internet pioneer back to the bargaining table with Microsoft Corp.
He nominated 10 candidates who are running on a platform that Yahoo should sell to Microsoft, which withdrew its $47.5-billion takeover offer this month. They include Icahn and a host of heavy hitters, including former Viacom Inc. Chief Executive Frank Biondi Jr., Dallas Mavericks owner Mark Cuban and former New Line Cinema co-Chairman Robert Shaye.
In a letter to Yahoo Chairman Roy Bostock, Icahn said he had snapped up 59 million Yahoo shares, worth about $1.5 billion, and was seeking permission from the Federal Trade Commission to amass as much as $2.5 billion worth. His holdings constitute about 4.3% of the Sunnyvale, Calif., company's stock.
He said he hoped Yahoo would listen to its shareholders and "move expeditiously" to close a deal with Microsoft, which this month withdrew its offer after the two companies failed to agree on a price.
Yahoo, for more than a decade a Silicon Valley darling with its goofy exclamation point and chummy culture, is bracing for a bitter fight with the hardened 1980s corporate-raider-turned-shareholder-activist, who is backed by an army of shrewd deal makers.
In a written response to Icahn, Bostock said Yahoo's directors had "kept an open mind and an open ear" throughout talks with Microsoft and acted on behalf of shareholders by rejecting a bid they believed substantially undervalued Yahoo.
"We do not believe it is in the best interests of Yahoo stockholders to allow you and your handpicked nominees to take control of Yahoo for the express purpose of trying to force a sale of Yahoo to a formerly interested buyer who has publicly stated that they have moved on," Bostock wrote.
Icahn has received no signs of renewed interest from Microsoft, according to people familiar with the matter. The Redmond, Wash.-based company declined to comment.
Yahoo's shares rose 61 cents to $27.75, while Microsoft's gained 52 cents to $30.45.
Most proxy contests are settled before they come to a vote, New York University finance professor David Yermack said.
