updated 11:30 pm EDT, Thu May 15, 2008
Yahoo Rebuffs Icahn
Yahoo tonight responded to Carl Icahn's attempt to nominate a takeover board at the company by accusing the investor of "misunderstanding" the basis of Yahoo's decisions and being unaware of Microsoft's true behavior during its failed attempts to negotiate a takeover of the search firm. Yahoo Board Chairman Roy Bostock argues in an open letter to Icahn that Yahoo was "clear" on its unanimous rejection of the original Microsoft offer as undervaluing the firm and that it had repeatedly declared its openness to a higher-priced deal, which Microsoft had allegedly refused to consider until very late in negotiations. The finality of Microsoft's rejection should be as sign, according to Bostock.
"We do not believe it is in the best interests of Yahoo! stockholders to allow you and your hand-picked nominees to take control of Yahoo! for the express purpose of trying to force a sale of Yahoo! to a formerly interested buyer who has publicly stated that they have moved on," he says, adding that there are no other offers on the table to encourage Microsoft to make a bid at high value.
The letter also claims that Microsoft's final offers were disingenuous and that the Windows producer's self-touted $33 per share bid was never formally delivered in writing or with extra details, necessary to continue further negotiations. Microsoft also chose to walk away after the single raise to its bid "within hours" of a counter-offer rather than strike a compromise, Bostock says.
Microsoft has yet to respond to any of these allegations.
Yahoo has frequently made assertions that its existing board is the right one to lead the company and has pointed to multiple examples that it claims are signs of its health, including promising results from its experiment with running some Google AdSense search ads as well as its relatively strong quarterly results. The company's ability to beat expectations is cited in the message to Icahn as evidence that his bid is unnecessary.