A Truce for Yahoo, but the War May Not Be Over
July 21, 2008
From NYTimes:
Carl C. Icahn backed down over the weekend and worked out an agreement with Yahoo to join Yahoo’s board, along with two more people on his slate, which had been set to go to shareholders for a vote on Friday. Yahoo’s statement is here.
The tipping point may have been the decision by Bill Miller, the influential portfolio manager at Legg Mason, to vote his 4.4 percent stake in Yahoo in favor of the company’s slate of candidates. I’d assume that over the weekend, Mr. Icahn realized that a majority of shareholders held similar views.
This can’t exactly be seen as a vote of confidence in Yahoo’s current management. Rather it is an expression of a lack of confidence in Mr. Icahn’s ability to solve Yahoo’s problems.
A troublemaking shareholder like Carl Icahn can make a difference when there is a relatively easy decision a company could make that for some reason its management is resistant to. For the first part of the year, the narrative fit that template: Microsoft wanted to buy the company and Jerry Yang, Yahoo’s chief executive, didn’t want to sell it. If that was still true, Mr. Icahn’s board slate would probably sail to victory.
But in the convoluted story this has become, Microsoft says it no longer wants to buy Yahoo and Mr. Yang is desperate to sell it. If Mr. Icahn found himself in control of Yahoo, what could he do? He suggested he may just sell Yahoo’s search business to Microsoft, leaving shareholders owning a portal with some serious problems and a board taking cues from an investor who hardly uses a computer.
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