Icahn Rings Proxy-War Alarm, Says Microsoft Still Interested in Yahoo

Posted 07/07/2008 at 3:20pm | by Pulkit Chandna

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Carl Icahn should feel at home in boardroom coups, after having fashioned a few of them. Along with experience, he has tenacity and a never-say-die attitude, which is rearing its head in the aftermath of Microsoft’s deal with Yahoo. While some people attribute the breakdown of (doomed-from-the-start?) talks between the two tech giants to company culture clash, Icahn is trying his best to agitate Yahoo stockholders into a revolt against the company’s board. Icahn’s fresh missive to Yahoo stockholders claims Microsoft is still interested in buying Yahoo’s search engine business or the entire company.

He reports to stockholders that Microsoft's CEO has personally conveyed his distaste for the current Yahoo board, and so, wouldn’t enter any negotiations with the incumbent board. Ballmer wasted no time in confirming Microsoft’s interest in “a major transaction with Yahoo, such as either a transaction to purchase the "Search" function with large financial guarantees or, in the alternative, purchasing the whole company." But he made it amply clear that negotiations would be resumed only after a new board of directors is elected.

Yahoo wants Microsoft to prove its seriousness and make an offer immediately, if it’s interested in a deal. The company warned in its response that it doesn’t believe a deal – with a new board - would be in the best interest of Yahoo stockholders.