In language much more formal than his blasting of Icahn and Microsoft in interviews, Yahoo’s Jerry Yang responded — with capital letters — to the proposed board of directors designed to unseat him. Today on Bastille Day, Yahoo’s fighting its own revolution.
There was no mention of liberte, egalite or fraternite, but Yang could have easily addressed his shareholders:
“Chers Les Miserables,”
Yahoo Inc. mailed this letter to stockholders.
July 14, 2008
Dear Fellow Stockholder:
We have written to you before to explain why we believe your Board of Directors has the knowledge, experience, independence and commitment to best represent the interests of all Yahoo! stockholders. We have also told you why we believe the slate of directors advanced by Carl Icahn is not the right answer for Yahoo!.
When Mr. Icahn began his proxy contest he had no articulated plan for Yahoo! other than a sale of the Company to Microsoft. Today he still lacks a plan that makes sense for Yahoo! stockholders. On Monday, July 7, Mr. Icahn announced that he and Microsoft had engaged in conversations he claimed could lead to a transaction between Yahoo! and Microsoft if his slate is elected. In what was clearly a coordinated approach, Microsoft promptly followed Mr. Icahn’s announcement with its own press release, stating that if – but only if – a new Board of Directors is elected, it might be interested in discussing either a transaction involving only Yahoo!’s valuable search assets or an acquisition of the entire Company (something Microsoft had refused to discuss with your Board for months).
The fact that Microsoft and Icahn had indeed teamed up to serve their own ends became entirely clear the evening of Friday, July 11, when Microsoft and Mr. Icahn jointly proposed a new complex restructuring of Yahoo! that would include the acquisition of Yahoo!’s search business by Microsoft. Your Board of Directors was given less than 24 hours to accept the proposal, the fundamental terms of which Microsoft and Mr. Icahn made clear they were unwilling to negotiate. After reviewing the proposal with our legal and financial advisors, your Board of Directors determined that accepting the proposal is not in the best interests of our stockholders.
The Board’s rejection of the new proposal was based on a number of factors, including the following:
• 1. Yahoo!’s existing business plus its recently signed commercial agreement with Google has superior financial value and less complexity and risk than the Microsoft/Icahn proposal.
• 2. The Microsoft/Icahn proposal would preclude a potential sale of all of Yahoo! for a full and fair price, including a control premium.
• 3. The major component of the overall value per share asserted by Microsoft/Icahn would be in Yahoo!’s remaining non-search businesses which would be overseen by Mr. Icahn’s slate of directors, which has virtually no working knowledge of Yahoo!’s businesses.
• 4. The Microsoft/Icahn proposal would require the immediate replacement of the current Board and removal of the top management team at Yahoo!. Your Board believes these moves would destabilize Yahoo! for the up to one year it would take to gain regulatory approval for this deal.
Click to read the rest of this post…
