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San Francisco Chronicle – A major investor called on Yahoo Inc. to sell its search business to Microsoft Corp. on Wednesday, adding to the pressure on the Sunnyvale Web portal to restart talks with its rival.
Meanwhile, Yahoo agreed to water down an employee severance plan that had been criticized as extravagant, raising speculation that the company was shopping itself for a sale. The changes were made to settle a lawsuit in which shareholders accused Yahoo of devising the severance plan to foil Microsoft’s takeover bid earlier this year.
Ivory Investment Management, a hedge fund that owns a 1.5 percent stake in Yahoo, sent a letter to board members that said a sale would garner $15 billion and help restore the company’s tumbling finances.
eBrandz – In a move expected to fuel speculation over Yahoo Inc.’s search for a new chief executive — Corporate raider and billionaire investor Carl Icahn augmented his stake in Yahoo, has bought up close to 7 million additional shares of the Internet Company over three days this week, paying around $67 million, according to regulatory filings.
Icahn, a billionaire hedge-fund manager who now holds a seat on Yahoo’s board, acquired 6.77 million additional shares of Yahoo stock during November 24-26 for 67 million dollars, now owns 75.6 million of the company’s shares, or a 5.4 percent stake valued at around $870 million based on Yahoo’s closing share price on Friday, according to the documents filed with the Securities and Exchange Commission and dated Wednesday.
The company’s stock moved up 93 cents, or nearly 9%, to $11.51 in the shortened trading session after Icahn, a Yahoo board member who has been pushing a strategy shift or a sale to Microsoft Corp., said he had bought about 6.8 million shares.
Boston Globe- Carl Icahn has hit the roughest patch of his hedge fund career.
His $7.9 billion in hedge funds fell 7 percent between October and April, the biggest peak-to-trough loss since the funds opened in November 2004, according to investors. That compares with an average annual return on his investments of 53 percent from 1996 to mid-2004.
Icahn has lost money on cellular-phone maker Motorola Inc., his biggest investment. The 72-year-old billionaire also failed to persuade executives at Yahoo Inc. and Biogen Idec Inc. to take his advice for boosting their stock.
While falling equity markets and the slowing economy are beyond Icahn’s command, the setbacks at Yahoo and Biogen Idec don’t bode well for his future as an activist shareholder, said Brett Barth, a partner at New York-based BBR Partners, which has invested $1 billion in hedge funds.
Bloomberg- Carl Icahn has hit the roughest patch of his hedge-fund career.
His $7.9 billion in hedge funds fell 7 percent between October and April, the biggest peak-to-trough loss since the funds opened in November 2004, according to investors. That compares with an average annual return on his investments of 53 percent from 1996 to mid-2004.
Icahn has lost money on cellular-phone maker Motorola Inc., his biggest investment. The 72-year-old billionaire also failed to persuade executives at Yahoo! Inc. and Biogen Idec Inc. to take his advice for boosting their stock prices.
Reuters- Officially, a potential $47.5 billion deal for Microsoft Corp to buy Yahoo Inc is over, at least for now.
But longer term, hedge fund managers and analysts said the Yahoo board now faces more pressure than ever to deliver shareholder value in the wake of the collapsed deal and could be forced to reopen merger talks with the software maker.
"This board is toast with a capital T," said Herb Denton, a veteran shareholder activist and head of Providence Capital. "They managed to leave $14.5 billion on the table. Name one shareholder that can be pleased with this outcome, other than the insiders."
New York (HedgeCo.Net) – Another hedge fund is backing Carl Icahn’s proxy battle against Yahoo, days after Paulson & Co. gave their support.
Third Point LLC, a hedge fund that manages $5.7 billion in assets, is believed to be on board after accumulating 5 million shares of Yahoo Inc., along with T. Boone Pickens, an oil investor who has amassed 10 million shares.
An undisclosed source told reporters that Third Point head Dan Loeb “strongly supports Icahn and supports his slate and thinks that he is shining a bright light on the botched process at the Yahoo board in negotiating the deal with Microsoft.”
Icahn believes that Yahoo should be sold to Microsoft, in order to better compete with Google. Yahoo rejected Microsoft’s initial offer of $47.5 billion before the software giant broke off talks earlier this month.
Initiating his fight last Thursday, Icahn believes, “it is quite obvious that Microsoft’s bid of $33 per share is a superior alternative to Yahoo’s prospects on a standalone basis." Talks between Microsoft and Yahoo are said to have been revived.
Paulson & Co., the $30 billion hedge fund manned by famed John Paulson, currently holds 50 million shares in Yahoo. Paulson has expressed his desire for the merger, aligning himself with Icahn last week.
Hedge funds, who push for high returns in the short run, many times take a proactive approach in restructuring a company in which they are invested. Icahn is also aiming to strategically place himself, along with Mark Cuban, Frank Biondi and Robert Shaye on the board.
Even with only a few companies backing the proxy battle, the force behind them is monumental. The supporters will have accumulated over 80 million shares of Yahoo, which equates to over 5% of the total shares.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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