Yahoo says it’s still talking to Microsoft
Yahoo Inc. said Wednesday that deal talks were ongoing with Microsoft Corp. as the company resisted an attack by billionaire critic Carl Icahn, who called its recent actions “deceitful.”
Yahoo President Susan Decker trumpeted new ad partnerships with Wal-Mart Stores Inc. and others as Icahn, an activist investor, stepped up pressure on Yahoo over its rebuff of Microsoft’s $47.5-billion buyout offer. She said some form of deal with Microsoft could still come about, sending Yahoo shares up 2.7% for the day, despite Icahn’s later blistering attack on Chief Executive Jerry Yang’s leadership at Yahoo.
In an invective-filled letter to Yahoo, Icahn used terms like “deceitful,” “self-destructive,” “misleading” and “insulting to shareholders” for moves by Yang and the board to retain employees in a severance plan likely to make a deal with Microsoft more costly.
He called on Yahoo to rescind anti-takeover defenses and merge with Microsoft, writing, “Even I am amazed at the length Jerry Yang and the Yahoo board have gone to in order to entrench their positions and keep shareholders from deciding if they wished to sell to Microsoft.”
Yahoo fired back in kind, saying Icahn’s attack on the company “seriously misrepresents and manipulates the facts” regarding dealings between Microsoft and Yahoo and that it relied on allegations from an error-filled lawsuit.
The company labeled as “patently untrue” key assertions in the complaint filed by lawyers for two Detroit pension funds that seek to unwind its anti-takeover defenses in order to force Yahoo to accept a full Microsoft merger deal.
“Notably, you accuse us of turning down a $40-per-share offer and ‘sabotaging’ a $33-per-share offer,” Yahoo Chairman Roy Bostock said in a reply to Icahn that contends that he lacks a credible plan for Yahoo other than selling out to Microsoft.
Icahn’s criticisms stem from arguments made in a legal complaint attacking Yahoo that was unsealed this week and that purports to shed light on Yahoo’s long resistance to Microsoft’s entreaties.
That suit refers to media reports that assert Yahoo rejected a $40-a-share Microsoft merger offer in early 2007 and a $33-a-share verbal offer Microsoft has said it made early last month that was again rebuffed.
Icahn has proposed an alternative board ahead of Yahoo’s annual meeting Aug. 1. He told cable channel CNBC that “we have good odds” in the Yahoo proxy battle and said a deal in which Microsoft would buy parts of the company would not serve shareholders.
