Yahoo! Tries to Head Off Icahn, Disparage Microsoft Takeover Bid

In an open letter to shareholders aimed at staving off an overthrowing of its board of directors by shareholders backed by billionaire investor Carl Icahn, Yahoo! says that it doubts Microsoft was ever serious about acquiring the company. Yahoo's board is up for reelection on August 1, and Icahn says that if he can toss out the existing board members, he'll replace them with members who are more amenable to a deal with Microsoft. The letter describes a presentation that it has provided to shareholders.

"Icahn's dissident slate is not the right answer," the letter reads. "\[The\] current Board of Directors remains the best and most qualified group to maximize value for Yahoo stockholders." The letter than describes portions of the presentation, which includes its takes on the various Microsoft offers, the Google agreement, progress around key strategies, and "the extensive and relevant experience of Yahoo's existing" board of directors. It also criticizes Icahn's "ill-defined agenda."

The letter also describes a section of the presentation called "Setting the Microsoft Record Straight," in which the Yahoo! board outlines its version of the events surrounding Microsoft's on-again, off-again attempts to purchase the company. "The presentation notes that at meetings on May 17 and June 8, 'Microsoft unequivocally stated that it had no intention of making a full company acquisition and clarified on June 8 that it would not do so even at the price range it had previously suggested.' The presentation further notes that Microsoft was unresponsive to multiple requests from Yahoo! and that its actions and statements were inconsistent, casting 'doubt on whether Microsoft was ever committed to a whole company acquisition.' "

For the record, Microsoft has described Yahoo's description of these events as "revisionist history."

Yahoo! saves its harshest words for Icahn, however, noting that the billionaire is "focused on selling the Company to Microsoft, even though Microsoft has repeatedly confirmed that it is not interested in a full acquisition." "Mr. Icahn misrepresents the manner in which Yahoo! negotiated with Microsoft and the cost and purpose of the Company's change in control severance plan," the letter adds.

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