YHOO/Carl Icahn

Can someone tell me how Icahn having a 4% stake in YHOO (55+ million shares) will bring Microsoft back to the table (for merger talks)? Is Icahn just trying to spike YHOO’s price and make a quick gain?

I don’t think so. He really likes being an activist shareholder and YHOO rejecting MSFT’s offer offends him. His 4% stake is quite enough to start a shareholder rebellion and a proxy fight. There are plenty of shareholders who feel the same way about it that he does.

What would be a good solution to this yahoo mess? Would it be better if they simply renegotiate with MS, or seek other merger possibilities, or remain independent? Why wouldn’t Google buy out YHOO for the sake of monopoly?

Uh, because the anti-trust people don’t like people doing things “for the sake of a monopoly”

If I buy 100M shares of YHOO, does that give me the ability to make MSFT buy them?

It might. If you bought 100M shares of YHOO you would be a big voting bloc. You would have significant influence about who sits on the board and you would get a call from Carl Icahn immediately.

And Steve Ballmer would care that I did this…why?

No Steve Ballmer wouldn’t care unless he is still interested in YHOO. I suspect that he is and would be happy if you delivered it up to him for $30.50/share

My point is simply that shareholders of YHOO can do little for force MSFT to buy YHOO.

Carl (I am on first name basis with him) did not get into this ‘hoping’ MSFT will be ready to buy at the right price. There was a quote by a senior MSFT exec saying something like if yahoo comes to us and asks us to buy it at $33 we will consider it… Having said that, he would have also talked to a lot of people who were involved in the deal (including execs at MSFT), so again hes not hoping and its a very calculated move.

Well the problem now is that YHOO is rejecting the bid. Icahn’s influence matters because he’s an experienced activist who is betting that he knows how to build a coalition and get other shareholders who were previously on the fence to take his side. Think of it as risk arb, only he’s not betting on the probability of the deal going through, he’s betting on his ability to push it through.

I laughed when Icahn said he go deep into YHOO. Should be fun to watch.

This is going to be great. Good drama…Let’s cast the movie.

Carl C. Icahn ICAHN CAPITAL LP 767 Fifth Avenue, 47th Floor New York, NY 10153 May 15, 2008 Roy Bostock Chairman Yahoo! Inc. 701 First Avenue Sunnyvale, CA 94089 Dear Mr. Bostock: It is clear to me that the board of directors of Yahoo has acted irrationally and lost the faith of shareholders and Microsoft. It is quite obvious that Microsoft’s bid of $33 per share is a superior alternative to Yahoo’s prospects on a standalone basis. I am perplexed by the board’s actions. It is irresponsible to hide behind management’s more than overly optimistic financial forecasts. It is unconscionable that you have not allowed your shareholders to choose to accept an offer that represented a 72% premium over Yahoo’s closing price of $19.18 on the day before the initial Microsoft offer. I and many of your shareholders strongly believe that a combination between Yahoo and Microsoft would form a dynamic company and more importantly would be a force strong enough to compete with Google on the Internet. During the past week, a number of shareholders have asked me to lead a proxy fight to attempt to remove the current board and to establish a new board which would attempt to negotiate a successful merger with Microsoft, something that in my opinion the current board has completely botched. I believe that a combination between Microsoft and Yahoo is by far the most sensible path for both companies. I have therefore taken the following actions: (1) during the last 10 days, I have purchased approximately 59 million shares and share-equivalents of Yahoo; (2) I have formed a 10-person slate which will stand for election against the current board; and (3) I have sought antitrust clearance from the Federal Trade Commission to acquire up to approximately $2.5 billion worth of Yahoo stock. The biographies of the members of our slate are attached to this letter. A more formal notification is being delivered today to Yahoo under separate cover. While it is my understanding that you do not intend to enter into any transaction that would impede a Microsoft-Yahoo merger, I am concerned that in several recent press releases you stated that you intend to pursue certain “strategic alternatives”. I therefore hope and trust that if there is any question that these “strategic alternatives” might in any way impede a future Microsoft merger you will at the very least allow shareholders to opine on them before embarking on such a transaction. I sincerely hope you heed the wishes of your shareholders and move expeditiously to negotiate a merger with Microsoft, thereby making a proxy fight unnecessary. Sincerely yours, CARL C. ICAHN

why does Carl Icahn care so much about it? aside from the fact that he owns a boatload of YHOO. (didn’t he buy so much of the stock just so he can do this proxy contest?)…i’m really interested in understanding the story.

You just got this? Gezz I didn’t have a clue that 3_letters was Roy Bostock.

chailatte Wrote: ------------------------------------------------------- > why does Carl Icahn care so much about it? > aside from the fact that he owns a boatload of > YHOO. (didn’t he buy so much of the stock just so > he can do this proxy contest?)…i’m really > interested in understanding the story. Because he loves a good fight.

i guess a lot of people here are not acquainted with Icahn…this is better than any movie u’l see this summer… in short he bought the shares at around $25, $1.5 billion worth (includes options)…he wants to go as high as $2.5 billion…assume hes successful in selling yahoo to MSFT for $33, heck even assume $31…calculate the profits!!

who is icahn? why is he doing this? is doing this how he became a billionaire?

^ tell me that wasnt a serious question?