Yahoo has responded to investor Carl Icahn’s threat to take control of Yahoo’s board and force it back to the negotiating table with Microsoft. The search company said Icahn’s proposal shows “a significant misunderstanding” of how it handled Microsoft’s offer, and argued that Yahoo’s current board remains “the best and most qualified group” to handle its affairs.
In a letter to Yahoo made public earlier Thursday, Icahn said he planned to nominate 10 candidates to replace the incumbent directors on Yahoo’s board. He argued that Yahoo was wrong to reject Microsoft’s offer to buy the company for US$33 per share, and said he hopes to install a new board at Yahoo’s shareholder meeting in July that will resume the merger talks.
Yahoo released its response to Icahn later Thursday, signed by board Chairman Roy Bostock.
“Unfortunately, your letter reflects a significant misunderstanding of the facts about the Microsoft proposal and the diligence with which our board evaluated and responded to that proposal,” the company wrote. “A fair-minded review of the factual record leads to one conclusion: that Yahoo!’s ten-member board, comprised of nine independent directors along with Yahoo CEO Jerry Yang, remains the best and most qualified group to maximize value for all Yahoo stockholders.”
The letter describes the negotiations with Microsoft in detail, in a bid to show that Yahoo took the offer seriously. It says it would not be in the best interests of Yahoo’s shareholders for Icahn to nominate a slate of directors “for the express purpose of trying to force a sale of Yahoo to a formerly interested buyer who has publicly stated that they have moved on.