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IT Blogwatch

A Daily Digest of IT Blogs from Richi Jennings

Microhoo: ready... PROXY FIGHT!

TAGS:Carl Icahn, M&A, Mark Cuban, Microhoo, Microsoft, Yahoo
IT TOPICS:Desktop Applications, Internet, Windows & Microsoft

It's IT Blogwatch: in which billionaire investor Carl Icahn starts a proxy fight to restart the Microsoft/Yahoo! merger talks. Not to mention a bizarre German street performer...

Juan Carlos Perez reports:

Billionaire investor Carl Icahn has sent a letter to Yahoo Inc.'s board announcing he is nominating 10 candidates to replace all incumbent directors at the company's shareholders meeting in July. The move, rumored since earlier this week, is intended to ultimately reignite merger negotiations between Yahoo and Microsoft Corp ... Icahn charges the board with acting irrationally and losing the faith of shareholders and Microsoft ... Microsoft announced its $44.6 billion bid for Yahoo on Feb. 1, but walked away from the deal three months later, on May 3, saying the companies couldn't agree on a price ... Icahn said it is "unconscionable" that Yahoo's board didn't allow shareholders the option to accept Microsoft's latest offer, which he pointed out represented a 72% premium. more

Todd Bishop adds:

Declaring himself "perplexed" by the actions of Yahoo's current board members, billionaire investor Carl Icahn today launched his attempt to unseat them following Microsoft's decision to withdraw its acquisition bid. Icahn nominated an alternative board that includes himself, Dallas Mavericks owner Mark Cuban, former Viacom and Universal Studios CEO Frank Biondi, Jr., and other investors and corporate executives. In his letter, Icahn says he hopes the current board will negotiate a deal with Microsoft, making his fight unnecessary. Microsoft has formally withdrawn its bid for Yahoo, and it's not clear what the Redmond company would do if Icahn is successful in unseating the Yahoo board. Microsoft isn't commenting on Icahn's move as of this morning. more

Who? Kevin Newcomb knows hoo:

Billionaire investor Carl Icahn, who's invested more than a billion dollars in Yahoo, will initiate a proxy contest ... a move designed to jumpstart the stalled MicroHoo merger ... In a proxy battle, Icahn would nominate 10 directors to replace Yahoo's board before today's deadline. The new slate of directors is said to include former Viacom Inc. CEO Frank Biondi, an Icahn proxy war ally ... For Icahn, it's all about the Benjamins. In Sunnyvale, he'll be known as the Yahooligan... [He] hasn't won every proxy war he's waged: Marvel Comics, for example, stands out as a success story after the superhero company defeated Icahn and his minions ... [but he] has some big wins under his belt: he spurred Motorola's decision to spin off its mobile phone business in March. He has also led a campaign by video-store chain Blockbuster to purchase electronics retailer Circuit City Stores. If that deal doesn't go through, Icahn has stated he'll buy Circuit City. No word on whether he'd buy Yahoo. more

Henry Blodget and Dan Frommer analyze this:

Jerry Yang's nightmare won't end ... it's a full slate [of directors], not a "short slate." Icahn thinks--probably correctly--that he'll need a big fat stick to swing at Yahoo, and a full slate provides that. We suspect Icahn hopes the threat of impeachment will be enough to drive Yahoo's board back to Redmond in short order--long before the July shareholder meeting. Icahn will likely canvass other Yahoo shareholders to assess how much support he has and then demand a meeting with Yahoo's board. If he can demonstrate that he has the support of a significant percentage of Yahoo's shareholders, we suspect Jerry Yang or Roy Bostock will soon be placing a call to Microsoft ... [but] Icahn may have some selling to do in Redmond, too. We suspect they'll listen--why wouldn't they?--but we doubt they'll be willing to pay more than $33. more

Terry Heaton shakes his head:

Icahn personifies the word “colorful” in his thoughts about the “botched” Microsoft-Yahoo merger ... Mark Cuban is one of the directors that Icahn wants on the Yahoo board. The always outspoken — and often controversial — Cuban is no friend of Google and is thinking out loud about how to beat them (with his Mahalo, Cuban has a considerable dog in the fight), prompting John Battelle to note that Cuban “is clearly drinking and blogging again” ... putting Mark Cuban on his Yahoo wonder board ... boggles the mind. more

Adam Ostrow sees the irony:

Cuban made his fortune when he sold Broadcast.com to Yahoo for $5.6 billion back at the peek of the first dot-com boom. This move paves the way for Yahoo shareholders to elect the alternative board at the company’s annual meeting, which would then set the stage for Microsoft to make a new bid to acquire the company. In the letter, Icahn discloses that he has acquired 59 million shares of Yahoo. Hence, if he’s able to get his board elected and Microsoft to re-offer $33/share, he stands to make several hundred million dollars. How’s that for motivation? more

At deadline, Owen Thomas has Yahoo!'s response:

Roy Bostock, Yahoo's chairman of the board, has responded to corporate raider Carl Icahn. The one-word version: "Unfortunately." That word sums up so well the letter, Yahoo's hamhanded reply to Icahn, and the whole sorry mess. Bostock has a point: There has not been a written offer on the table since Yahoo rejected Microsoft in February, and so neither the current board nor Icahn's replacements have any proposed sale to consider. But the letter is a stiffly worded blowoff, with a non-sequitur ending, "We look forward to a productive dialogue." Dialogue about what, precisely? All the ways Yahoo's board is right, and Icahn is wrong? Bostock may well have a point there, but this is no way to handle a combative professional tormentor of companies. Icahn is a vain old fool who requires substanceless coddling, not factual arguments. more

And finally...

Unusual German Street Performer

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Richi Jennings is an independent analyst/adviser/consultant, specializing in blogging, email, and spam. A 21 year, cross-functional IT veteran, he is also an analyst at Ferris Research. You can follow him on Twitter, pretend to be Richi's friend on Facebook, or just use boring old email: blogwatch@richi.co.uk.

Previously in IT Blogwatch: