Icahn spearheads new move to enable acquisition of Yahoo! by Microsoft

08 July 2008

Microsoft Corp yesterday said that it would be willing to return to the negotiation table on a deal to acquire all or part of Yahoo Inc, provided a new Yahoo board is elected, shortly after Icahn, who owns more than 4 per cent of Yahoo stock, issued an open letter saying that over the past week he had spoken frequently to Microsoft CEO Steve Ballmer.

Microsoft had pulled out of talks with Yahoo over an unsolicited $47.5-billion bid.

Microsoft's statement is being interpreted as a clear show of support for billionaire investor Carl Icahn's alterante board slate to oust the current Yahoo board at the company's annual shareholder meet on 1 August.

Icahn says that Ballmer expressed his apprehensions over the possibility of the current Yahoo board mismanaging the company while a deal awaited regulatory approval. This he said was an impediment to Microsoft putting forth any proposals for the company.

Using this to drum up support for his slate, Icahn said that his proposed alternate board would offer Microsoft the security it needed to risk putting up any money for a deal during the regulatory process. He said not just Microsoft, but any acquirer would "want a steward they would feel comfortable with".

Yahoo responded to Icahn's disclosure saying in a statement that it continues to be willing to reopen talks with Microsoft, though any deal it negotiated with Icahn would not be in the best interests of Yahoo stockholders.