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Icahn's Agenda: Get Shareholder Support, Revive MSFT-YHOO Talks

Posted May 16, 2008 02:12pm EDT by Aaron Task in Investing, Internet, Venture Capital, M and A, IPOs

Having launched a proxy fight, billionaire financier Carl Icahn's next move is to amass enough support for his effort, while simultaneously getting Yahoo and Microsoft back to the negotiating table.

So far, he's having more success with the former vs. the latter.  

Yesterday, Icahn landed a big fish in the person of John Paulson, who owns 50 million shares of Tech Ticker's parent. Other hedge funds, including Mason Capital Management, Farallon Capital and Appaloosa, are also supporting Icahn, The NY Post reports.

Still unknown is the stance of Capital Re's Gordon Crawford and Legg Mason's Bill Miller, who are key to any effort to oust (or merely influence) Yahoo's board.  Combined, Crawford and Gordon represent ownership of about 23% of Yahoo shares.

Crawford has publicly scolded Jerry Yang and Yahoo's "so-called independent" board so it's reasonable to think he could be supporting Icahn's effort.

Miller would seem to be more of a wildcard given his recent comments in The NY Times: “Unless Microsoft is willing to come back and discuss a deal, it is hard to see what additional directors or new directors would be able to accomplish on behalf of shareholders.”
 
The other challenge for Icahn is to get the two parties back to the negotiating table. That might not be so easy given the tone of Yahoo chairman Roy Bostock's letter to Icahn and the ongoing silence from Microsoft.

18 Comments

Doug B
Doug B - Friday May 16, 2008 02:22PM EDT

Ask yourself one question, would Yang have accepted the the $33 he was once offered? I'm sure he would so put your tail between your legs Yang and get it done now so shareholders can overwhelmingly approve and move on.

you
ge d - Friday May 16, 2008 02:45PM EDT

Jerry Yang! don't be so selfish! You have been so rich, so lucky for so long now is the time to give millions of shareholder a break!!

you
gracepini1929 - Friday May 16, 2008 02:46PM EDT

Get with it Yahoo, how much do you want???

you
young p - Friday May 16, 2008 02:48PM EDT

Yahoo not for sale at $33. MSFT needs to fork over $34-$35 to get it done. Crawford has already said $34 so that would be the most likely scenerio. MSFT still needs YHOO more than YHOO needs MSFT. GOOG handing MSFT their butt on a place when it comes to search right now and that wont change without YHOO.

you
Yahoo! Finance User - Friday May 16, 2008 02:53PM EDT

Carl is a billionaire for a reason, Jerry too. They both could and should keep buying millions more shares if they think Yhoo should be valued at 37. In the meantime, it's better to look at future deals with other smaller players, like the CNET deal, I think Local.com (LOCM) and Marchex (MCHX) will be in play soon. IACI should also sell off Ask.com, all the bigger players should be paying attention to these 3 little ones.

you
goodluckegeonu - Friday May 16, 2008 03:01PM EDT

i like the progame.

you
davesmall73 - Friday May 16, 2008 03:12PM EDT

I bought Yahoo share's on the strength of the Microsoft deal going through and had gave up hope after Mircosoft had pulled out, but with these new developments there still see a chance for a profit to be made !!

you
davesmall73 - Friday May 16, 2008 03:37PM EDT

I bought Yahoo share's on the strength of the Microsoft deal going through and had gave up hope after Mircosoft had pulled out, but with these new developments there still see a chance for a profit to be made !!

you
worldtraveller123 - Friday May 16, 2008 03:38PM EDT

YHOO should try hard to get with Google, that's their business. Why become a department in a MSFT company? Why isn't BAIDU try to get with YHOO?

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worldtraveller123 - Friday May 16, 2008 03:43PM EDT

This is how the rich get richer. They join force to make more money. They are not smart, they just have more money. Why isn't Carl go and form a company on his own if he is so smart and than he can sell to MSFT.

you
Yahoo! Finance User - Friday May 16, 2008 03:46PM EDT

Blodgett - When will he be indicted again?

you
Yahoo! Finance User - Friday May 16, 2008 04:01PM EDT

Ichan is just using "back to MSFT negotiation" to get the support to overtake YHOO's current board. He won't settle with any offer below $40. YHOO has great assets, but lossy execution. YHOO has earnings, Icahn could cut 50% work force to make it more profitable to make MSFT pay 40 bucks. He won't care YHOO long term, just to make his 40 bucks. MSFT needs YHOO more than YHOO want to be purchased by anyone. MSFT is a big sucker now for not crashing YHOO's stock back to $20, which I think would be possible by announcing $10 billion MSFT stock buy back right after walk away - to show YHOO shareholders and specuators that he really MEANT IT! It's too later for MSFT now Ichan is in.

you
Yahoo! Finance User - Saturday May 17, 2008 04:07AM EDT

That idiot blodgett. Who the hell employed him to talk on these tickers. He is one stupid bum who dozn't know what hez talkin about. A freakin chameleon who keeps changing colors. I've been an ardent follower of the Microsoft - Yahoo tug of war via finance.yahoo.com and started seeing this fool speaking out loud without any logic. Nothing...I repeat NOTHING that he has so far analysed has occured and infact everything else has happened. What a fool...I'd never watch that idiot talk again.

you
criollo2 - Saturday May 17, 2008 07:51AM EDT

I think MSFT probably cares less for the search engine. They are only interested in eye balls to deliver advertisments well beyond search. The question is the price per eye ball (they come in a pack of two, lol). I am sure they have plan B, C, D, all the way past Z. YHOO at 33 gets them a lot of eyeballs but they dont come cheap. My guess is that AOL is cheaper because TWTC wants out and they would still have plenty of $$ left for up and coming start-ups. It will be interesting to see how Icahn's slate is presented, if they are separate votes for each individual board member Yang is out and YHOO holders can pick and choose from the left overs. MSFT signal of a true intention to walk away will appear as play for a company like Facebook or AOL or a set of others that can deliver a significant number of eye balls.

evano20012001
evano20012001 - Saturday May 17, 2008 11:26PM EDT

Ballmer will come back. Deal gets done around $34. Sooner the better for everybody.

you
hotairballoonist - Sunday May 18, 2008 09:19AM EDT

Either way, come August, I expect to see Yahoo closing at least $33.00/share.....sharks smelling blood. A real feeder frenzy !

you
Yahoo! Finance User - Sunday May 18, 2008 09:05PM EDT

Blodgett is a self serving lying scumbag. I do exactly opposite of what he says!

you
Yahoo! Finance User - Sunday May 18, 2008 09:05PM EDT

Blodgett is a self serving lying scumbag. I do exactly opposite of what he says!

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