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New York (HedgeCo.Net) – Carl Icahn continues his quest to shake up the board of Yahoo, and this time, that includes ousting CEO Jerry Yang. According to the Wall Street Journal, Icahn is channeling shareholder complaints in hopes to fuel his proxy battle and to facilitate the Microsoft deal.
Last month, several Yahoo shareholders filed a complaint against Yang and the board of Yahoo, claiming that they acted in a way to discourage the Microsoft deal and that Yang, who has a personal disdain for the software giant, did everything he could to quell the prospect of a merger. According to the statements, Yahoo had rejected a bid from Microsoft back in January 2007, when CEO Terry Semel said no to a $40/share offer.
The plaintiffs also suggest that Yang, along with co-founder David Filo and other Yahoo executives, not only turned down Microsoft’s bids, but set up a nice exit plan for employees to leave the company should there be a hostile takeover by constructing attractive compensation plans.
"Nobody ever understood the magnitude of what Yahoo did to do avoid making a deal," said Icahn.
Yahoo, who issued a statement last night, said that Yang, along with the board, has been "crystal clear that it would consider any proposal by Microsoft that was in the best interests of its shareholders".
Recently, hedge funds Paulson & Co. and Third Point LLC publically backed Icahn’s push for the Yahoo/Microsoft deal, with the hopes that the deal would help fuel higher returns and help Yahoo better compete against Google. Both hedge funds hold a major stake in Yahoo.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
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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
HedgeCo.Net is a premier hedge fund database and community for qualified and accredited investors only. Membership on www.hedgeco.net is FREE and EASY. We also offer FREE LISTINGS for Hedge Funds! Be sure to check out our sister sites. For more information, visit www.hedgeconetworks.com
Bloomberg – Microsoft Corp., the software maker that scrapped a $47.5 billion bid for Yahoo! Inc. this month, may forge a partnership with the Internet company in the search- advertising market to challenge Google Inc.
Microsoft, which abandoned its takeover attempts May 3, said yesterday that it’s exploring a transaction with Yahoo and may renew attempts to buy the entire company. The two may combine units that sell ads that run next to Internet search results, said Morningstar Inc. analyst Toan Tran.
Billionaire investor Carl Icahn is pressuring Yahoo to ally itself with Microsoft to compete with Google, which dominates the Internet search market. Icahn, backed by investors such as hedge- fund manager John Paulson, plans to oust Yahoo’s board if Chief Executive Officer Jerry Yang fails to sell to Microsoft.
“Carl Icahn is in this to make a quick buck, so whatever helps him make money he’ll be happy with,” said Tran, who is based in Chicago and doesn’t own shares of either company. “What Carl Icahn definitely wants is an outright sale of Yahoo to Microsoft at some price higher than what it is now.”
Microsoft has offered to buy Yahoo’s search unit and take a minority stake in the company after Yahoo gets rid of its holdings in Asia, Reuters reported today, citing a person familiar with the talks. Microsoft spokesman Frank Shaw declined to confirm or deny the report, while Yahoo spokeswoman Diana Wong declined to comment.
Microsoft, based in Redmond, Washington, fell 53 cents to $29.46 at 4 p.m. New York time in Nasdaq Stock Market trading. Sunnyvale, California-based Yahoo rose 2 cents to $27.68, while Google dropped $2.55 to $577.52.
