West Palm Beach (HedgeCo.Net ) – Merger arbitrage guru John Paulson and his $30 billion hedge fund are supporting a dissident board slate that was brought forth on Thursday by investor Carl Icahn, though he’s hoping it won’t resort to a proxy fight.
Paulson & Co., the hedge fund that made billions off the subprime fallout, has recently amassed 50 million shares of Yahoo Inc., worth about $1.44 billion. Icahn holds around 59 million shares, giving the two investors a combined 7.7% stake in the company.
“We were disappointed that Yahoo failed to reach an agreement with Microsoft,” said Paulson in a recent statement. “We continue to believe that a combination between Yahoo and Microsoft would form a dynamic company and a stronger competitor to Google.”
Paulson & Co. is so far the only hedge fund that Icahn has aligned himself with, though it wouldn’t be a surprise if more shareholders who are seeking aggressive returns jump on board.
"It is clear to me that the board of directors of Yahoo has acted irrationally and lost the faith of shareholders and Microsoft," Icahn said, justifying his actions. "It is quite obvious that Microsoft’s bid of $33 per share is a superior alternative to Yahoo’s prospects on a standalone basis."
In addition to strategically placing himself on the suggested board, Icahn is pushing for other big names like Mark Cuban, Frank Biondi and Robert Shaye.
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