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Yahoo announces delay in general meeting over Icahn move PDF Print E-mail
Sunday, 25 May 2008

AFP, WASHINGTON - Yahoo is delaying a July 3 shareholders meeting in a move aimed at staving off a showdown with corporate raider Carl Icahn, who is out to overthrow the struggling Internet search pioneer's board of directors.

Icahn has reportedly bought a stake of more than four percent in the California firm and says he plans to oust board members he accuses of botching recent takeover talks with Microsoft.

Microsoft walked away from the bargaining table after Yahoo's board spurned its offer of nearly 50 billion dollars (32 billion euros) on the grounds they feel it undervalues Yahoo.

Icahn has nominated a Microsoft-friendly slate, which includes him, to replace all ten Yahoo board members at elections to be held at an annual meeting originally scheduled for July 3.

Yahoo urged shareholders Friday to rebuff the corporate raider's efforts to replace board members with people amenable to a takeover by Microsoft.

"We do not believe the election of the Icahn Entities nominees to our board of directors is in the best interests of our stockholders," Yahoo said in a filing with the US Securities and Exchange Commission (SEC).

"Our board of directors urges you not to sign or return any proxy card sent to you by the Icahn Entities."

Icahn is lobbying shareholders to back him, urging them in an SEC filing "not to sign any proxy card sent to you by Yahoo," but to instead use the stock holder voter cards to elect him and his fellow candidates.

Machinations by Yahoo executives and billionaire Icahn are "going to increasingly mirror regular politics" with tactics factored into seemingly simple decisions such as where and when shareholders meet, Silicon Valley analyst Rob Enderle predicts.

"Yahoo will be trying everything they can think of to win," he said. "Their problem is Carl is an expert at this and they aren't. It is like a novice politician going up against the Kennedy family."

Yahoo notified the SEC that it was delaying the shareholders meeting to an unspecified date late in July because it needs time to prepare for the threatened coup attempt.

"Their goal is to shift that meeting out as far as possible in hopes that they will have a better story or Carl loses interest and has something else to do," Enderle said. "In the current environment, Icahn wins."

Analyst Matt Rosoff of the independent firm Directions On Microsoft says it appears Yahoo is stalling for time to close a deal on a partnership that might help appease angry shareholders.

Yahoo and Microsoft said early this week that they have reopened discussions on a tie-up, but for a new deal that would probably not be an outright takeover.

What Microsoft might have in mind is handling Yahoo's Internet search advertising in a manner along the lines of a trial-run Yahoo did last month with Google.

Google's money-making methods proved superior to Yahoo's advertising platform.

Yahoo said its board members "continue to consider a number of value-maximizing strategic alternatives for Yahoo, and we remain open to pursuing any transaction which is in the best interest of our stockholders."

Microsoft's initial takeover bid unveiled in February was aimed at merging online resources with Yahoo to better compete with Google, which has been gobbling up an increasing share of the lucrative Web search market.
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