Yahoo lobbies against Icahn takeover
Yahoo on Monday urged shareholders to
reject a company takeover by billionaire shareholder activist Carl Icahn,
claiming that the current board was best qualified to maximize shareholder
value, dpa reported.
The embattled company also claimed that Microsoft's actions "cast doubt" about whether it was serious over its 47.5-billion-dollar acquisition bid which Yahoo rejected in early June and which led to the takeover attempt by Icahn.
"Icahn misrepresents the manner in which we negotiated with Microsoft," Yahoo said in its investor presentation. "Our board remains the best and most qualified group to maximize value for Yahoo stockholders."
Yahoo laid out its case in a stockholder presentation filed with the Security Exchange Commission ahead of the August 1, 2008 proxy fight where a slate of board directors proposed by Icahn will vie to oust the incumbent board, including company founder and CEO Jerry Yang.
The corporate insurgents claim that Yang and the board botched the Microsoft negotiations that provided the best option for shareholders, and adopted a "poison pill" severance package that effectively priced the company out of an ownership change.
The presentation said Icahn had outlined an "ill-defined plan" for Yahoo "based on misrepresentations". It noted that Icahn's calls for a sale to Microsoft were essentially "moot" since Microsoft "has repeatedly confirmed that it is not interested in a full acquisition."
Yahoo's filing also said it made "no sense" for the company to accept Microsoft's "hybrid" offer to buy only the company's search business and a 16 per cent stake in the company for 9 billion dollars, plus annual advertising payments.
The company claimed the deal would not improve its operating cash flow and that Microsoft's estimates of cost savings were unrealistic.
Such a deal offered less potential for profit than a non-exclusive search-advertising deal Yahoo signed with Google, which would increase cash flow by 250 million to 450 million dollars in its first year and strengthen Yahoo in the market for search display advertising.
"The combination of our leading positions in search and display together with the benefits expected from our recently-signed agreement with Google make us exceptionally well-positioned to capitalize on the convergence of search and display," the company said. "Our Board and management team have consistently focused on and will continue to focus on maximizing stockholder value."