Friday Yahoo! and Carl Icahn traded barbs back and forth. First Icahn responded to Yahoo! chairman Roy Bostock's response to a June 4 letter raising concerns about a Yahoo employee compensation plan. Yahoo responded to Icahn’s letter by saying that he “has no credible plan to operate Yahoo.”
Icahn's letter to Bostock on Friday actually laid out a plan - a five-point plan.
* First, I would work to have the board replace your "poison pill" severance plan with an acceptable alternative.
* Second, I intend to ask our new board to hire a talented and experienced CEO (attempting to replicate Google's success with Eric Schmidt) to replace Jerry Yang and return Jerry to his role as "Chief Yahoo". Indeed, it was much speculated that Jerry would serve in the CEO role temporarily until a permanent CEO was hired after the board asked Terry Semel to resign.
* Third, I intend to ask our new board to inform Microsoft that unless any alternative transaction can insure a $33 or higher stock price (of which I am skeptical) all talks of alternative transactions are over.
* Fourth, I will ask our new board to offer publicly to sell Yahoo! to Microsoft in a friendly and cooperative transaction.
* Fifth, to the extent Microsoft does not want to make a proposal, I will ask our new board do a deal on search with Google, but only if it contains termination provisions that would in no way impede a subsequent acquisition by Microsoft.
I'm sure Jerry Yang appreciated the "hire a talented and experienced CEO" part.
Icahn then said he was going to ask Bostock a couple of questions, and asked him three instead. He's rich but can't count.
* Why don't you, now that you have the opportunity, remove the "poison pill" severance plan that I find to be ridiculous and thereby remove a major obstacle to a Microsoft acquisition?
* In my opinion, Microsoft does not believe you will ever sell the entire company on a friendly basis. So why don't you stop dancing around the subject and publicly offer to sell the company to Microsoft for $34.375 per share and promise to cooperate completely?
* Why are you still giving hope to Microsoft that there is a possible "alternative deal"? As long as there is the possibility of an "alternative deal", isn't it obvious that Microsoft will not make a bid for the whole company?
So, to Icahn, $34.375 is a fair offer. One thing, though: how does he know Microsoft is still interested. Some of the moves they've made lately seem to indicate they've moved on.
Yahoo! wasn't impressed. In a very short press release, they said:
Leaving aside Mr. Icahn's inaccurate interpretation of our retention plan, we again note that he has no credible plan to operate Yahoo!. We believe that Mr. Icahn's suggestion that we cancel our retention plan would have a destabilizing impact on Yahoo! and would clearly not be in the best interests of our shareholders. Furthermore, his suggestion that we put out a price publicly to see if Microsoft will alter its stated position is ill-advised. As we have stated numerous times publicly and privately, we are open to any transaction including a sale to Microsoft if it is in the best interests of shareholders.
Once again, Yahoo! said it's about the "best interests" of the shareholders. We'll see how this turns out, but it seems the barbs are getting sharper.
Source: By Tech Ex http://technologyexpert.blogspot.com/
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