May 16 2008
Icahn wants Yahoo! to sell
Thought the Yahoo! acquisition was dead last week after Microsoft walked away from the deal? Not so much.
But this time the push for a sale is coming from Carl Icahn. I don’t know a lot about Icahn, but I do know this: he’s rich, and he has lots of stocks, and the things he says can force change within companies.
Icahn claims that Yahoo!’s board didn’t uphold its fiduciary duties when it turned down Microsoft’s $33 a share bid and asked for $37 a share. Icahn holds about 4% of Yahoo!’s stock, but he also has the support of others like Mark Cuban and a few funds that could push that number up to nearly 30%.
Ichan wants Yahoo! to restart talks with Microsoft. And if they don’t comply he will attempt to replace Yahoo! board with acquisition-friendly members that will push a sale through.
Interesting.
It does seem like Yahoo! is being a bit overly optimistic about it’s value. Yahoo! last reached $37 a share two years ago, and before Microsoft announced it’s bid the company was in the sub $20 range.
And it’s not like Yahoo! had much momentum either. The company has been beat down consistently by Google, and was amid a round of layoffs when Microsoft’s bid was announced.
So Yahoo! is in a bit of a bind here. CEO Jerry Yang can put up a fight, but that will be a big distraction for the company…and it may ultimately be unsuccessful. Yahoo! investors do deserve a good shot at some cash for their shares as well…$37 is a ridiculous offer and Microsoft’s bid of $33 a share sounds mighty generous.
We’ll see in coming months. At this point I think Yahoo! is just being stubborn about being acquired by Microsoft. And although I understand that, Yahoo! is a public company with a responsibility to their shareholders.
