Billionaire investor Carl Icahn has officially threatened to take over Yahoo's board with $2.5 billion in stock if they do not revive takeover talks with Microsoft over its failed $47.5 billion bid.
Carl Icahn is an American billionaire financier, corporate raider, and private equity investor. His net worth is estimated at about US$14 billion as of 2008 and he ranks as the 46th richest man in the world.
Techcrunch reported that Icahn could possibly take interest in the Yahoo debacle and now it appears he's knee deep in the situation.
Icahn has sent an open letter to Yahoo Inc stating that he has acquired 59 million Yahoo shares, and has been given permission to acquire $2.5 billion worth.
The letter has been posted by Yahoo, below are excerpts:
It is clear to me that the board of directors of Yahoo has acted irrationally and lost the faith of shareholders and Microsoft. It is quite obvious that Microsoft's bid of $33 per share is a superior alternative to Yahoo's prospects on a standalone basis. I am perplexed by the board's actions...
During the past week, a number of shareholders have asked me to lead a proxy fight to attempt to remove the current board and to establish a new board which would attempt to negotiate a successful merger with Microsoft, something that in my opinion the current board has completely botched...
I have therefore taken the following actions: (1) during the last 10 days, I have purchased approximately 59 million shares and share-equivalents of Yahoo; (2) I have formed a 10-person slate which will stand for election against the current board; and (3) I have sought antitrust clearance from the Federal Trade Commission to acquire up to approximately $2.5 billion worth of Yahoo stock...
Bloomberg.com reports that Icahn has led proxy fights like this before at Motorola Inc. and drug maker ImClone Systems, frequently pushing them to sell part or all of their businesses to help revive sagging share prices.
Icahn is reacting to Yahoo CEO Jerry Yang's rejection of $33-a-share offer, stating that he wanted $4 more per share for his company. Stockholders would have stood to make huge profits from the merger and it was only a matter of time before they struck out.
At this point the merger may go through whether Yang wants it to or not... the money is just too huge and the stakes are too high. This will surely be an exciting story to follow.
