When last we looked in, Yahoo has successfully warded off takeover aspirations by Microsoft, using what looked like a scorched-earth defense chronicled here.
I've also mentioned, though I'm afraid I spoke rather slightingly about, the possibility of a Yahoo shareholder revolt, on the part of those who believe management should have sold the company to MS.
Well, nobody, not even a doofus such as myself, can speak slightingly of that scenario now. Yahoo has a full-fledged rebellion on its hands, led by the formidable Carl Icahn.
On Thursday, Icahn wrote to the board of Yahoo. It is "quite obvious," his letter said, "that Microsoft's offer of $33 per share is a superior alternative to Yahoo's prospects on a standalone basis."
He said that over the preceding ten days (since MS had formally withdrawn its proposal) he had purchased 59 million "shares and share-equivalents of Yahoo," and formed a 10-person slate prepared to run a proxy campaign to replace the current board.
Yahoo replied the same day. They made several points, such as that the formal written offer from MS was for $31, not $33. They acknowledged that MS did indicate a willingness to go to $33, but this "was never delivered in writing and did not include details of a cash/stock mix."
Yahoo also maintains that during the negotiations MS never made clear its "thinking with regard to the regulatory issues associated with a potential transaction," and that their lawyers asked for additional information on that point on March 28, but it was never supplied.
Those of you with good instincts for corporate infighting might be saying "whoa there, back up!" Icahn's letter had mentioned a purchase of 59 shares, some of which weren't really of STOCK of Yahoo but were of something called "stock equivalents".
What exactly does that mean, and how much of Icahn's purchases are of "equivalents" rather than of real shares of stock? I'll look into that.
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