Entrepreneur Carl Icahn has launched a campaign to oust Yahoo's board of directors, accusing the company's directors of acting "irrationally" and "irresponsibly" by rejecting Microsoft's $ 47.5 billion purchase offer.
Icahn, one of Wall Street's most aggressive financial predators, has proposed 10 independent candidates for the election that will take place at Yahoo's annual meeting, including himself and Mark Cuban, a billionaire partner who made his fortune selling a young webcasting company, Broadcast.com, to Yahoo in 1999.
His initiative sets the stage for a showdown to take place in California on July 3, in which disillusioned investors will confront the company over the failure of negotiations with Microsoft.
In a letter to Yahoo Chairman Roy Bostock describing his intentions, Icahn wrote: “In my opinion it is clear that Yahoo's board of directors has acted irrationally and lost the trust of its shareholders and Microsoft. It's pretty obvious that Microsoft's $ 33-a-share offering is a superior alternative to Yahoo's prospects alone. "
In the letter Icahn added that he and many other shareholders of the company are convinced that a combination between Yahoo and Microsoft would create a dynamic company and, more importantly, able to compete with Google on the Internet.
Icahn wants to remove the entire board of directors of Yahoo, including its president, Jerry Yang, co-founder of the company.
The anger has been spreading among Yahoo investors, who have seen the value of their shares fall 15% after the withdrawal of Microsoft, staying below the price that it was willing to pay.
Among the candidates proposed by Icahn are a former Viacom boss, Frank Biondi; a Harvard law professor, Lucian Bebchuk; a former director of New Line Cinema, Robert Shaye; and Icahn's right-hand man, Keith Meister.
For years Yahoo has struggled to meet Wall Street expectations, falling behind Google in Internet search, online advertising, and Web innovation.
Among the alternatives that Yahoo now has are: trying a deal with Google to share its advertising technology or reigniting negotiations to join AOL, Time Warner's Internet affiliate. In any case, according to experts, Yahoo's chances of going it alone are slim.
Source: The Guardian Business