Yahoo Says Icahn 'Will Destroy Stockholder Value' - InformationWeek

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7/17/2008
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Yahoo Says Icahn 'Will Destroy Stockholder Value'

The company told shareholders that Icahn and Microsoft want to serve their own "narrow special interests, clearly not your interests."

Carl Icahn and Microsoft are "making misleading statements about their plans for Yahoo," Chairman Roy Bostock and CEO Jerry Yang said in a letter to Yahoo shareholders this week.

The scathing letter urged shareholders to re-elect current board members Aug. 1, and warned that "the iCahn-Microsft agenda ... will destroy stockholder value at Yahoo." The company took the proxy fight to a new level while telling shareholders that Icahn and Microsoft want to serve their own "narrow special interests, clearly not your interests."

The letter portrays Icahn as an agitator with a short-term investment approach who wants to recover his investment without regard to the interest of other shareholders. Bostock and Yang also said Icahn has "severely handicapped himself" in his ability to get a fair price from Microsoft because already indicated he plans to sell all or part of Yahoo to Microsoft.

"That fact, combined with his lack of an operating plan going forward, means that he will have no leverage to negotiate a fair deal with Microsoft. He has set himself up for failure," they said in the letter.

The pair said Icahn and his slate lack the knowledge to negotiate a complex restructuring of the large, innovative, high-tech company, and they lack the experience needed to manage and lead Yahoo while it awaits transaction approval for a year.

To illustrate that fact, the pair printed the following Wall Street Journal quote from Icahn: "Technology hasn't really been one of the things I've focused on too much before. ... It's hard to understand these technology companies."

The letter also accused Icahn and Microsoft of flip flopping, entering a marriage of convenience and creating an odd couple.

"Certainly Microsoft is a well-respected and successful company and we have been clear that we are fully prepared to do a deal with them," the letter stated. "But Microsoft's flip flops and inconsistencies over the past five months are so stupefying that one can only conclude that Microsoft was never fully committed to acquiring Yahoo."

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