Sparing words flying, the YIM Chronicles intensified yesterday with the Internet pioneer, Yahoo! Inc., billionaire corporate activist, Carl Icahn, and the world’s largest software company, Microsoft Corp. Each waged a battle of words to set the record straight in last weekend’s case of Yahoo’s rejection of the proposed company breakup and who ultimately has the solution that would bring profit Yahoo shareholders.
Yahoo’s CEO, Jerry Yang, and Chairman of the Board, Roy Bostock, tailored a letter to shareholders on Monday explaining why they “believe that this odd and opportunistic alliance of Microsoft and Carl Icahn has anything but the interests of Yahoo!’s stockholders in mind.”
Addressing last weekend’s proposition, Yang and Bostock state, “It is ludicrous to think that your Board would accept this “take it or leave it” proposal – under which we would restructure the Company and hand over to Microsoft Yahoo!’s valuable search business and to Carl Icahn the rest of the Company – with less than 24 hours to respond.” The two reiterate that “Carl Ichan is not the right answer for Yahoo” and end with two choices that stockholders now face:
- Either to turn their Company and its uniquely valuable combination of assets over to Carl Icahn and his nominees and allow Microsoft and Mr. Icahn to dismantle the Company and deliver its search business to Microsoft on terms they believe would be disadvantageous to Yahoo! stockholders.
- Or to re-elect Yahoo’s experienced and dedicated Board with a clear strategy and a demonstrated commitment to create value for Yahoo! stockholders.
Lastly, the pair state, “We are prepared to let you, our stockholders, not Microsoft and Carl Icahn, decide what is in your best interests and we look forward to the upcoming vote.”
Carl Icahn’s open letter to stockholders fires back. “I have yet to see a company distort, omit and twist events and facts in the manner that Yahoo! has done in their press release issued Saturday night, July 12th.” He continues to address last weekend’s deal and calls Yahoo’s statement about the Microsoft-Icahn alliance “patently ridiculous”.
Icahn states that Microsoft CEO, Steve Ballmer, “has made it clear to me that if a new board consisting of my nominees were to be elected, Microsoft would be willing to enter into discussions immediately regarding a transaction along the lines described above.” He appeals with, “If and when elected, I strongly believe that in very short order the new board would, subject to its fiduciary duties, be approving an offer along these lines for its shareholders.”
Microsoft issued their own statement, Microsoft Sets the Record Straight, addressing Yahoo’s July 12th letter as containing “inaccuracies that need to be corrected” and claiming that the “proposal did not include changes to Yahoo!’s governance.” Tempers appearing to be escalating, Microsoft includes, “This discussion has been mischaracterized as a take it or leave it ultimatum, rather than a timetable in order to move forward to intensive negotiations.”
Pretty Woman, this is not as the YIM Chronicles continue to accelerate. According to The Wall Street Journal, Jerry Yang sent a company-wide e-mail on Monday preparing Yahoo employees for the proxy fight to intensify stating, “Proposals and attacks by Microsoft and Carl Icahn leading up to our meeting are likely to get even more contentious.”
Yahoo!’s Board of Directors’ meeting looms on the horizon when shareholders decide the fate of the Internet pioneer. That fateful day is scheduled on August 1, 2008.