Billionaire corporate raider Carl Icahn announced today he was taking the Yahoo! Board of Directors to the court of shareholder opinion. Icahn, who has acquired approximately 59 million shares of Yahoo! (about 4% of shares), put the proxy fight in motion this morning with a letter to Yahoo! Chairman Roy Bostock.
Icahn’s letter to Bostock said he was putting ten names up for election to the Yahoo! Board in a bid to re-open acquisition negotiations with Microsoft.
“It is clear to me that the board of directors of Yahoo has acted irrationally and lost the faith of shareholders and Microsoft,†Mr. Icahn said in the letter. “It is quite obvious that Microsoft’s bid of $33 per share is a superior alternative to Yahoo’s prospects on a standalone basis.â€
While thousands of other Yahoo! shareholders might agree with Icahn’s opinion, few of them have the resources to take action. Icahn does. His named slate of potential directors is made up of a who’s-who list of dot-com or entertainment industry executives. According to the NYTimes, the list includes;
Lucian A. Bebchuck – Harvard Law Professor
Frank J. Biondi Jr. – former CEO of Viacom and Universal Studios
Mark Cuban – Owner, Dallas Mavericks, Founder of Broadcast.com
Keith A. Meister – executive at Icahn Enterprises
Brian S. Posner – CEO ClearBridge Advisors
Robert K. Shayne – Chair and CEO of New Line Cinema
Carl C. Icahn – CEO, Icahn Enterprises
Interestingly, Icahn has chosen to present a full list of ten potential directors. Many suggest he would have better success with a smaller list however the attempt to replace the entire Board of Directors is an obvious shot at Yahoo! founder and current CEO Jerry Yang.
Icahn appears to want to make an example of Jerry Yang. Saying many Yahoo! shareholders had asked him to push the entire Board aside, Icahn wrote,
“It is unconscionable that you have not allowed your shareholders to choose to accept an offer that represented a 72 percent premium over Yahoo’s closing price of $19.18 on the day before the initial Microsoft offer.”
Over the coming weeks, expect to see a campaign style election. Two opposing slates with billions of dollars at stake will decide fate of what most users consider the face of the Internet. May you live in interesting times…
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