Microsoft would deal with a new Yahoo! board says Icahn
Investor Carl Icahn and Microsoft confirm interest in a renewed Yahoo! deal if board is ousted in August
The Microsoft-Yahoo! merger took another twist yesterday, with investor Carl Ichan stating, and Microsoft confirming, that a deal to buy Yahoo! would be back on if the Yahoo! board changes on 1st August.
In an open letter to shareholders, Icahn said that he has recently been holding discussions with Microsoft CEO Steve Ballmer, in which Ballmer said that Microsoft would be interested in a renewed deal to buy either all of Yahoo! or just its search business. According to Icahn, however, Microsoft would only be interested if the current Yahoo! board were replaced.
The letter went on to state: "There is no need to keep pointing out the mistakes I believe Yahoo! made by not immediately taking a $33 offer made by Microsoft. But one thing is clear - Jerry Yang and the current board of Yahoo! will not be able to ‘botch up' a negotiation with Microsoft again, simply because they will not have the opportunity."
Microsoft confirmed its interest in dealing with an alternate board in its own statement, although the company did say that it would not comment further until after the annual shareholder meeting due next month.
In response, Yahoo! issued its own statement, saying that it had still been in discussion with Microsoft about a deal as late as last month, but had been told that Microsoft was no longer interested.
Yahoo! then went on to suggest that it was still open to offers from Microsoft, stating: "If Microsoft and Mr. Ballmer really want to purchase Yahoo!, we again invite them to make a proposal immediately. And if Mr. Icahn has an actual plan for Yahoo! beyond hoping that Microsoft might actually consummate a deal which they have repeatedly walked away from, we would be very interested in hearing it."
The increasingly bitter saga began in January with an unsolicited bid from Microsoft to buy Yahoo! for $44 billion. The deal finally fell through in May, at which point Icahn then amassed a large shareholding in Yahoo! and began a proxy battle with the board, and CEO Jerry Yang in particular.
In the interim, rumours have shot back and forth about the deal, with attacks made against Yang by Icahn and the media, Yahoo! questioning whether Microsoft was ever serious about a deal, Yahoo! management accused of setting obstacles in the way of a long term successful takeover, and a number of execs leaving the besieged search giant. Yahoo! has even signed an advertising deal with rival Google, with that deal now under investigation by US anti-trust investigators.
Icahn also said yesterday that he was already speaking to a prospective new management team for Yahoo!