The manager of a New York hedge fund with more than 1 million Yahoo shares said that by trying to unseat the entire board, Icahn was in effect giving the current directors a July 3 deadline to seal a deal with Microsoft or face certain defeat in the board elections.
Charles Elson, director of the University of Delaware's Weinberg Center for Corporate Governance, agreed. "Either they negotiate with Microsoft or they negotiate with Icahn."
Icahn warned Yahoo against pursuing "strategic alternatives" without consulting shareholders. Discussions with Google Inc. for an advertising partnership to boost Yahoo's profit from Web search continue. When it pulled its bid, Microsoft said the potential partnership had emerged as a deal breaker in takeover talks. Yahoo has also talked with Time Warner Inc.'s AOL unit about combining forces.
Microsoft wants to join with Yahoo to better compete with Google, which dominates the burgeoning market for Internet advertising. Microsoft made a public bid of $31 a share in cash and stock Feb. 1 and said it eventually raised its offer to $33 a share. But it broke off talks May 3 after Yahoo asked for $37 a share.
That breakdown left investors plotting how to pressure Yahoo to restart negotiations. Some urged Icahn to jump in.
Other members of the slate are Harvard Law School professor Lucian Bebchuk, Hawkeye Investments President John Chapple, Impact Venture Partners Managing General Partner Adam Dell, Icahn Enterprises Principal Executive Officer Keith Meister, Ocean Road Advisors Chairman Edward Meyer and private investor Brian Posner.
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jessica.guynn@latimes.com
joseph.menn@latimes.com
Guynn reported from San Francisco, Menn from Los Angeles.
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Icahn's allies
Carl Icahn's candidates for the Yahoo board:
* Carl C. Icahn, Icahn Capital
* Lucian Bebchuk, Harvard Law School professor
* Frank Biondi Jr., Waterview Advisors
* John Chapple, Hawkeye Investments
* Mark Cuban, Dallas Mavericks owner
* Adam Dell, Impact Venture Partners
* Keith Meister, Icahn Enterprises
* Edward Meyer, Ocean Road Advisors
* Brian Posner, private investor
* Robert Shaye, New Line Cinema
Source: Times research
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Activist investor
Recent efforts by Carl Icahn, above, to place new members on company boards.
Motorola
2008
Goal: 4 board seats
Result: 2 seats won
Icahn dropped a lawsuit against the company and increased his investment stake
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Biogen Idec
2008
Goal: 3 board seats
Result: ?
pending
Shareholders have been mailed ballots
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WCI Communities
2007
Goal: 10 board seats
Result: 3
seats won
Icahn is now chairman of the Florida home builder
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ImClone Systems
2006
Goal: 4 board seats
Result: 4 seats won
Icahn is now chairman
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Time Warner
2006
Goal: 5 board seats
Result: 2 seats won*
Icahn lined up five proposed directors but reached a compromise before nominating them
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Blockbuster
2005
Goal: 3 board seats
Result: 3 seats won
Icahn is a board member
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*Two independent directors added.
Source: Times research
