updated 08:20 am EDT, Mon July 21, 2008
Yahoo and Icahn Deal
Yahoo today said it has landed a deal with activist investor Carl Icahn that would help avert his proxy takeover of the search engine company's board of directors. The agreement ensures that eight board members, including company chief Jerry Yang and board chairman Roy Bostock, are allowed to stand for re-election with Icahn's support. In exchange, Icahn himself will be nominated to the board along with two of his previous choices, while board member and Activision Blizzard head Robert Kotick will turn down re-election.
Icahn claims to be pleased with the deal but says that a complete or search-only buyout by Microsoft should still be "given full consideration" and notes that Yahoo's entire board has agreed to discuss the matter before making any final decisions. Meanwhile, Yahoo is happy to have the "distraction" of a potential proxy fight for control of the board, according to Yang.
The deal follows just days after key investment firm Legg Mason backed Yahoo officials in the key shareholders meeting for August 1st, effectively thwarting any direct attempt by Icahn to vote out Yahoo's board with one that would publicly and willingly offer the firm to Microsoft.
Microsoft has yet to comment on the matter but has previously said it wouldn't pursue any further deals with Yahoo's existing board, which it perceives as actively hostile.