Monday, July 7, 2008
Yahoo to Microsoft: Put Your Money Where Icahn’s Mouth Is
If Microsoft is so intent on acquiring Yahoo, why doesn’t it go ahead and make another offer? That was the gist of Yahoo’s (YHOO) comment on Microsoft’s (MSFT) claim this morning that it’s interested in discussing an acquisition of some or all of Yahoo–but only if the company replaces its CEO and board of directors. In an incredulous reply to investor Carl Icahn’s letter to Yahoo shareholders and Microsoft’s statement on on the letter, the foundering Internet company accused the software giant of teaming up with Icahn to bully Yahoo into accepting a lousy deal.
If Microsoft really wants to buy Yahoo, “we again invite them to make a proposal immediately. And if Mr. Icahn has an actual plan for Yahoo beyond hoping that Microsoft might actually consummate a deal which they have repeatedly walked away from, we would be very interested in hearing it,” Yahoo said in a statement. The company noted as well that “as recently as June, Yahoo!’s independent directors and management approached Steve Ballmer about just such a transaction, only to be told that Microsoft was no longer interested even in the price range which they had previously proposed.”
So what now? Who knows. Piper Jaffray (PJC) analyst Gene Munster figures Icahn, who still plans to run a full board slate, has a decent chance of prevailing at Yahoo’s Aug. 1 meeting. “We had previously suggested that Icahn had a 30% likelihood of gaining control of Yahoo!’s board at the annual meeting,” Munster said in a research note. “Now we believe he has a 50% chance of gaining control.”
