Yahoo fires back at Icahn
Yahoo says activist investor Carl Icahn has an "inaccurate interpretation" of its employee-retention plan.(Mark Lennihan/Associated Press)
Yahoo Inc. has fired back at Carl Icahn, the activist shareholder who wants to sack its board of directors and CEO, saying he has no "credible" plan to operate the company.
Icahn, who owns shares giving him a four-per-cent stake in Yahoo, has for weeks been criticizing the company for rejecting a takeover offer from rival Microsoft Corp. The software giant pulled its $47.5 billion US bid for Yahoo on May 3, prompting Icahn to threaten a "proxy battle" wherein he and other shareholders will try to oust the company's board and chief executive officer Jerry Yang at its annual meeting on Aug. 1.
Recently unsealed documents from a shareholder lawsuit against Yahoo revealed that the company had instituted a generous employee-retention program in an effort to raise the cost of the takeover for Microsoft. On Friday, Icahn sent a letter to Yahoo's board requesting that the company scrap the program and settle for a takeover price of $49.5 billion US.
Icahn said if his mutiny succeeds, he will hire a "talented and experienced" CEO like Google Inc.'s Eric Schmidt to run Yahoo before trying to sell to Microsoft.
Yahoo replied to Icahn Friday with a release that called into question his understanding of its retention program, and which criticized his lack of constructiveness.
"Leaving aside Mr. Icahn's inaccurate interpretation of our retention plan, we again note that he has no credible plan to operate Yahoo," the company said in a statement.
"We believe that Mr. Icahn's suggestion that we cancel our retention plan would have a destabilizing impact on Yahoo and would clearly not be in the best interests of our shareholders."
Yahoo also said Icahn's suggestion of a sell-out price was "ill advised," adding that it was open to any transaction — including a takeover by Microsoft — that is in the best interest of shareholders.
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