Icahn doesn't understand Microsoft's offer, says Yahoo!

16th May 2008

The proxy takeover being mounted by Carl Icahn, the billionaire investor with a history of involvement in similar incidents, has awoken Yahoo!'s defences.

Investor unrest has been developing in the Yahoo! camp after the company would not accept a purchase offer of $47.5 billion (£24.4 billion) from Microsoft.

Mr Icahn owns 59 million shares in Yahoo! and Espen Eckbo, founding director of the Centre for Corporate Governance at Dartmouth College's Tuck School of Business, claims that his proposal of ten dissident board members may have a better than average chance of succeeding because shareholder dissatisfaction is so high.

However, Yahoo!'s chairman Roy Bostock commented that Mr Icahn has a poor understanding of the circumstances surrounding Microsoft's offer.

"We do not believe it is in the best interests of Yahoo stockholders to allow you and your hand-picked nominees to take control," he said in a letter to Mr Icahn.

The investor has written to Yahoo! stating that the company has lost the support of its shareholders by acting "irrationally" regarding Microsoft.