Yahoo! Issues Quick Response To Icahn’s “Ill-Advised” Letter

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The saga continues.  Yahoo! Inc. (NASDAQ:YHOO) issued a quick response to Carl Icahn’s letter containing a 5 point game plan for what would happen if his suggested slate of Directors takes over Yahoo!  Below is the response:

  Leaving aside Mr. Icahn’s inaccurate interpretation of our retention
  plan, we again note that he has no credible plan to operate Yahoo!.
  We believe that Mr. Icahn’s suggestion that we cancel our retention
  plan would have a destabilizing impact on Yahoo! and would clearly
  not be in the best interests of our shareholders. Furthermore, his
  suggestion that we put out a price publicly to see if Microsoft will
  alter its stated position is ill-advised. As we have stated numerous
  times publicly and privately, we are open to any transaction
  including a sale to Microsoft if it is in the best interests of

For those who don’t want to interpret the letter above, I’ll give a quick summary:
1.) Icahn doesn’t have a credible plan for Yahoo!
2.) Cancelling the severance packages built into the Microsoft Corporation (NASDAQ:MSFT) bid would make the company unstable post-acquisition.
3.) Asking Microsoft to buy the company whole again is “ill-advised” since Microsoft may no longer be interested.
4.) Yahoo! is still open to a sale if the shareholders agree.

The timeline and information source of the Yahoo! & Microsoft saga is available after the jump.

And below is the timeline of the Microsoft & Yahoo! saga:

June 2007: Former Yahoo! CEO, Terry Semel Resigns, Jerry Yang steps up.
July 2007: Yang makes a 100 day plan to get Yahoo! off the ground again.
February 1, 2008: Microsoft makes an unsolicited offer to Yahoo! for $44.6 billion.
February 9, 2008: Yahoo! passes on Microsoft offer.
February 11, 2008: Rumor is that Yahoo! may merge with AOL.
February 12, 2008: Microsoft CEO, Steve Ballmer sends a letter to Yahoo! “Microsoft reserves the right to pursue all necessary steps to ensure that Yahoo!’s shareholders are provided with the opportunity to realize the value inherent in our proposal.”
February 13, 2008: Layoff notices are given at Yahoo! Ryan Kuder Twitters the entire event.
April 4, 2008: Rumors begin to appear that Microsoft is deciding to pull the offer.
April 5, 2008: Microsoft sends a letter to Yahoo! stating that they may work out a separate deal with shareholders if a decision isn’t made.
April 7, 2008: Yahoo! Announces their AMP! advertising platform and stated that they want more money from Microsoft.
April 9, 2008: Yahoo! states that they may be interested in an ad outsourcing deal with Google.
April 10, 2008: Rumors appear that News Corp. AOL, and Google all want to arrange deals with Yahoo!
April 12, 2008: Capital Research & Management invests $2 billion more in Yahoo! shares giving them ownership of $6 billion worth of the company.
April 30, 2008: Rumor appears Microsoft increases the amount that they’re willing to spend.
May 4, 2008: Microsoft walks away from the negotiation table after YahoO! demands too much of a high price for Microsoft.
May 4, 2008: Yahoo! responds by saying that through this experience, Yahoo! emerged as a stronger, more focused company.
May 7, 2008: Yahoo! & Google become more serious about Google Ads appearing on Yahoo!
May 14, 2008: Major Yahoo! shareholder, Carl Icahn steps in and calls the Yahoo! Board irrational.
May 20, 2008: Microsoft makes an offer to buy Yahoo!’s Search Advertising Business for an undisclosed amount.
May 23, 2008: Yahoo! Director, Edward Kozel resigns to “spend more time with family.”
May 23, 2008: Yahoo! postpones shareholder meeting for the second time.
May 28, 2008: Jerry Yang claims company isn’t under siege and Microsoft is no longer interested in buying out the whole company at All Things D conference.
May 30, 2008: FTC officially approves Icahn’s large purchases of Yahoo! stock.
June 2, 2008: Yahoo! court documents state that Yahoo! was planning to turn down a deal with Google one day before the Microsoft bid.
June 3, 2008: Carl Icahn indicates if proxy battle is successful, he’d want Jerry Yang out of CEO position.
June 4, 2008: Yahoo! Board decides annual shareholder meeting date to be held on August 1. 
Icahn sends Yahoo! a letter explaining that he believes Yahoo! CEO, Jerry Yang sabotaged the Microsoft bid.  Roy Bostock responds to Icahn by saying that Microsoft is no longer interested in a full acquisition.
June 6, 2008: Carl Icahn sends a letter to Roy Bostock with a 5 point plan detailing what a new board would do for Yahoo!  Yahoo! sends back a quick response to Icahn saying that his letter is “ill-advised.”

Information Source:
[1] Yahoo! Inc. Press Release: Yahoo! Inc. Statement on Carl Icahn’s Letter of June 6, 2008

This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at
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