Yahoo! surrenders to Carl Icahn
Yahoo! gives investor Carl Icahn seat on the board in return for end to proxy battle; sell off still not ruled out
Yahoo! has finally called a halt to its fight with investor and corporate raider, Carl Icahn, and given him a seat on the Yahoo! board in return for his votes at the company's August AGM.
Icahn had proposed an alternate board of directors to take control of Yahoo!, following shareholder complaints over the way Yahoo! handled a takeover offer from Microsoft.
Although Icahn and two directors proposed by him will now be appointed to the board of Yahoo! the existing board will have to be re-elected at the shareholder meeting on 1st August, and Icahn is still sticking to his position that Yahoo! should either sell its search business or be sold outright.
In a statement issued by Yahoo! Icahn said: "While I continue to believe that the sale of the whole company or the sale of its search business in the right transaction must be given full consideration, I share the view that Yahoo!'s valuable collection of assets positions it well to continue expanding its online leadership and enhancing returns to stockholders.
"I believe this is a good outcome and that we will have a strong working relationship going forward. Additionally, I am happy that the board has agreed in the settlement agreement that any meaningful transaction, including the strategy in dealing with that transaction, will be fully discussed with the entire board before any final decision is made," he added.
Yahoo! chairman Roy Bostock, and CEO and co-founder Jerry Yang will both have to stand for re-election, along with six other existing board members, while Robert Kotick will stand down. Icahn, who holds around 4.98% of Yahoo! current stock, has agreed to support the board nominees, with the board expanding to eleven members.
In the Yahoo! press statement, Yang only said that he was glad the distraction of the proxy battle was over, and that he looked forward to working with "new colleagues on the Board" to take the company forward.
Bostock was more welcoming, saying: "We look forward to working productively with Carl and the new members of the Board on continuing to improve the company's performance and enhancing stockholder value. Yahoo! is a world-class company with an extremely bright future, and collaborating together, I believe we can help the Company achieve its ambitious goals."
The announcement possibly leaves the way clear for yet another approach from Microsoft to buy either the whole of Yahoo! or its search business. The Microsoft board had previously said that it could not work out a deal with the existing Yahoo! board and was waiting until after the AGM before reconsidering its position, but contradicted that with a new bid just over one week ago.