The epic continues: Billionaire Carl Icahn presses Yahoo, but Yahoo doesn't give up and snarls back

Perhaps the series Microsoft & Yahoo! Already seemed to everyone complete, there will be no hostile takeover, Yahoo! stumbled, and Microsoft lost interest and switched to other objects . But it would be a story without a happy end, corporate America is a shark that should absorb. And it’s so fascinating when professionals openly enter the fray that I want everything to go on ... And you don’t mind Yahoo !?

Billionaire Carl Icahn officially announcedof intention to remove the board of directors of Yahoo! and went on an aggressive attack. Icahn was disappointed that Yahoo! rejected the offer of Microsoft, and therefore decided to take matters into their own hands. In an open letter to Roy Bostock, chairman of the Yahoo! Board of Directors, he said that he had bought up 4% of Yahoo! of the total number (59 million shares), and added that the current council is “irresponsible,” rejecting Microsoft’s generous offer for the company over $ 40 billion, and they unconsciously requested $ 37 per share, after which Microsoft withdrew its offer.

He also said that he had formed a list of 10 people with whom he proposed replacing the current members of the Board of Directors. Mr. Icahn received support from John Paulson, hedge fund manager and founder of Paulson & Co, joining his votes to acquire a 3.6% stake in Yahoo! .. A number of other major Yahoo investors also said they would like to resume negotiations between Microsoft and Yahoo ! ..

I and many of your shareholders strongly believe that a merger between Yahoo! and Microsoft is driving a dynamic company, and more importantly, in this case, the combined company will be strong enough to win Google’s competition in the Internet market.

The deadline for the nomination of an alternative composition of directors was Thursday, which can replace the current one at the elections during the annual meeting of shareholders on July 3, 2008. The team was rather sickly. In addition to Icahn himself, the directors include:

* Lucian A. Bebchuck - professor of law at Harvard University;
* Frank J. Biondi Jr. - Former CEO of Viacom and Universal Studios;
* John H. Chapple - President of Hawkeye Investments LLC;
* Mark Cuban - Founder of Broadcast.com and owner of the Dallas Maverick's basketball team;
* Adam Dell - General Managing Partner of Impact Venture Partners Venture Fund;
* Keith A. Meister - partner of Icahn Enterprises;
* Edward H. Meyer - CEO of Ocean Road Advisors, Inc;
* Brian S. Posner - CEO of ClearBridge Advisors;
* Robert K. Shaye - Chairman, New Line Cinema.

This is not the first time Carl Icahn has been using his shareholder status in order to achieve reshuffles in various companies. Previously, his efforts changed leadership at Motorola, Blockbuster, and Mylan Laboratories.

Carl Icahn Received a Reply Letter from Yahoo!

Chairman of the Board of Directors Roy Bostock responded to a letter from Carl Icahn. Speaking in an adult way, Roy pushes water in a mortar, approximately 80% repeats the same as Jerry Yang in his reply letterSteve Ballmer. He focused on the events that took place in recent months between Microsoft and Yahoo, apparently sincerely believing that Icahn was not up to date, politely clarifying Mr. Icahn open questions, suggesting that the raider guru misinterprets the facts, which led him to think to gain control over the Board of Directors, and the desire to eat Yahoo! .. But, nevertheless, this subtle game that interests me, and ... ... Yahoo's nightmare continues!

Dear Mr. Icahn:

Unfortunately, your letter reflects a significant misunderstanding of the facts regarding the Microsoft offer, as well as the efforts that the management made in evaluating a possible deal with Microsoft. A reasonable and sober analysis should lead you to the conclusion that the current Council, led by Executive Director Jerry Young, remains the best possible alternative that can bring maximum benefits to shareholders of the company.

And vice versa, we don’t think it’s in the interests of Yahoo! that you manage to get the hands of candidates who have publicly stated that they came under your influence and with their help you would take control of Yahoo !, with its further sale already prepared in advance to buyers. Please allow me to remind you that there is currently no proposal to acquire Yahoo by a specific company or any other party. Despite everything, our position was crystal clear, since we were and are still ready to consider any proposals from any parties, including Microsoft, if it provides our shareholders with a full and definite financial benefit.

From the very beginning of the negotiation process with Microsoft, Yahoo! focused on one crucial goal: how to best maximize the value of stocks. Throughout this process, the Board carefully considered the initial proposal, which at that time was valued at $ 31 per share. After reviewing the report from our financial advisers, we unanimously concluded that the offer by Microsoft significantly underestimated Yahoo !, therefore, the deal was not in the interests of the company and our shareholders, and on February 11, 2008, we publicly rejected this offer.

After receiving a proposal from Microsoft on January 31, our Board of Directors met more than 20 times and considered the Microsoft proposal and other strategic alternatives. Throughout this process, We maintained a sober mind and subtle hearing. Our independent directors met with a number of our largest shareholders in order to find out their opinions to finally clarify the financial situation, whether Yahoo! fully by a company capable of maximizing the value of shares. In addition, our Council and management team met with many of our investors to discuss Yahoo!’s strategy with them and to hear their opinions on its value.

I would like to remind you of the countless contacts between the advisers of Microsoft and Yahoo !, senior management of the company, where we discussed all kinds of ways. Seven face-to-face Summits were also held. During these meetings, the strategic objectives to improve the search and the business model of advertising monetization were discussed, our views on the operational strategy and integration subject to the transaction with Microsoft, its prospects, as well as other issues. We believe that the certainty of the amount of the closing of the transaction is an important issue, we sought to understand Microsoft's ideology regarding regulatory issues related to the potential of the transaction. Our lawyers of March 28 requested additional information on legal documentation, which Microsoft did not provide.

On April 15th, a Yahoo! meeting was held, where at a meeting in which our financial advisers hosted, where We made it clear once again that we were open for a deal with Microsoft. During these discussions, Yahoo! made a detailed coverage of his strategic and financial plan, presenting our thoughts on integration and voiced an opinion regarding the potential synergies that could be achieved as a result of the transaction, in essence, We were ready to lay the foundation for the future, and without Microsoft's cloudy growth, but they wanted to understand and get answers to questions from which Microsoft concluded and significantly underestimated the company. After this meeting, We also presented Microsoft with a list of key decisions from our Council, which criticized some points,

Throughout this period, Microsoft continued to claim that it would not increase its offer, and, moreover, stated that it could even lower it. On the same day, May 2, We first heard from Microsoft's desire to increase our offer to $ 33 (although this “Offer” was verbal and never submitted in writing, and which did not include detailed information on the form of payment - in cash / shares), and even then we were not left decisive to continue negotiations, and then Jerry Yang made a counter offer, indicating the price of $ 37 per share, which was a reasonable price and guaranteed certainty that the transaction would be closed. This was announced at a personal meeting on May 3 in Seattle at Microsoft headquarters. Over the next few hours of waiting, Microsoft informed us in a letterthat they stop negotiations, and is no longer involved in the transaction.

In short, Yahoo! at each stage of this process was ready to make a deal with Microsoft.

And what we have today. Our company works just fine, as can be seen from our results for the first quarter. As we have already publicly stated, our Council continues to actively and efficiently explore various strategic alternatives for maximizing stock prices. None of the options currently under consideration could potentially prevent us from making a deal with Microsoft or with any other party.

We still believe that the current board of Yahoo! professionally, independently, and committed to go through a fast-paced online environment and able to do whatever it takes to add value to Yahoo! for its shareholders.

We look forward to a fruitful dialogue.
Sincerely,
Chairman of the Board of Directors,
Roy Bostock

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