Yahoo! chairman Roy Bostock fires back at Icahn

The decibel levels in the war of words between activist investor Carl Icahn and Yahoo! last month escalated to a higher pitch, with Icahn accusing Yahoo! of sabotaging Microsoft's offer. (See: Icahn seeks FTC clearance to acquire $2.5 billion worth Yahoo! stock; threatens proxy fight)

Icahn's open letter to Yahoo! board members accusing chief executive officer Jerry Yang of sabotaging the possible merger with Microsoft (See: Text of Carl Icahn's letter to Yahoo! Inc. chairman Roy Bostock)  has elicited a sharp response from Yahoo!, with chairman Roy Bostock hitting back with an open letter  accusing the activist investor's letter as "seriously misrepresents and manipulates the facts" of recent events involving Microsoft and Yahoo!, and claimed that Yahoo! has been proactively "reaching out" to Microsoft for an acceptable agreement, confirming a similar statement from Microsoft earlier of being engaged in talks regarding a transaction rather than an acquisition.(See: Microsoft proposes to buy Yahoo's search business) 

Bostock said Icahn's attack was based on ''a series of unsubstantiated allegations from a complaint filed in a Delaware court which grossly misstate the very clear record and position established by the Yahoo Board.''

Bostock said that in the past few weeks, the company had been in touch with Microsoft who has been maintaining that it was not interested in pursuing a full acquisition of Yahoo!. He also accused Icahn of lacking a plan for Yahoo! other than selling it to Microsoft, even though Microsoft has said that it was no longer interested in buying Yahoo!.

''Conspicuously absent from your letter is any credible plan for Yahoo other than a repetition of your insistence that the Company should sell itself to Microsoft,'' says Bostock and added "causes one to wonder what exactly would happen to our company if you and your nominees were to take control of Yahoo!.''

Refuting Icahn's claim that the employee retention plan was a ''poison pill'' defence against the Microsoft acquisition, Bostock said the plan was intended to help Yahoo! to attract and retain "the industry's best talent", and allow them to stay focused on Yahoo's goals.