Yahoo! rips into 'ludicrous, absurd' Microsoft/Icahn offer

Stephen Withers
Monday, 14 July 2008 11:34

IT Industry - Strategy

Yahoo! shareholders will have their opportunity to choose between the current board and Icahn's team at the company's annual meeting scheduled for August 1.

Microsoft appears to have lost its taste for a complete acquisition of Yahoo!, and there's no sigh of an alternative suitor.
 
So it looks like things will come to a head at the stockholder's meeting. Investors will face a choice between re-electing the current board, which would be seen as a vote of confidence in the company as a standalone business, or going for Icahn and his fellow candidates, who would presumably look to Microsoft as a purchaser of the search business.

If the current board is returned, the company is practically certain to remain independent unless an offer of at least $US33 per share comes along, and it's hard to see any future part for Icahn.

But if the Icahn team is chosen, Microsoft would presumably have the upper hand in negotiations - the Yahoo! board would be practically committed to selling the search operation, and might feel obliged to accept a more modest valuation than would be necessary to satisfy the current board. Unless, of course, a deal has already been done to deliver the search business at an agreed price.

What could cause the Yahoo! board to come unstuck? Please turn to the final page of this article.