Billionaire launches Yahoo! proxy battle

Stephen Withers
Friday, 16 May 2008 03:11

Business IT - Networking

Hedge fund Paulson & Co, which owns 50 million Yahoo! shares, has thrown its weight behind Icahn. However, John Paulson has told Bloomberg "We intend to support the Icahn slate but sincerely hope that Yahoo will negotiate an agreement with Microsoft, thereby making a proxy fight unnecessary."

Some commentators have suggested that taking aim at the entire board could destabilise the company, as CEO and co-founder Jerry Yang is held in high regard by employees.

Furthermore, there is no guarantee that a new board will be able to attract a renewed bid from Microsoft, and shareholders would need to consider what alternative strategies it could bring to bear.

Yahoo! shares rose slightly on the news, closing on May 15 at $US27.75. That's still well below the $US33 offer made by Microsoft during discussions with Yahoo! executives and board members.