Back in May I publiched a post named “Microsoft Walks Away From Yahoo“… I’m not 100% sure that was correct.
In what has become a saga fit for any daytime drama, it appears that Microsoft and Yahoo started talking again, with corporate raider Carl Icahn thrown into the mix somehow. Mr. Icahn has been calling for the ouster of Yahoo’s board of directors for some time now, and today made his proxy fight official by filing papers with the SEC to replace the existing board with his own slate.
All of this came about over the weekend as Yahoo rejected another offer from Microsoft that seems to have been quietly brewing for a while now. The new joint deal between Icahn and Microsoft was proposed Friday night and would have reportedly put Microsoft in charge of the search business and Icahn controlling the rest of the company. The proposal included ousting the current board, including CEO Jerry Yang, and replacing them with Icahn’s chosen people.
According to a story in the Wall Street Journal, Yahoo has been willing to talk about selling at $33 a share, but their current board must stay in tact. This has been the main sticking point for Microsoft/Icahn, and their offer seems to have been more than generous. Reportedly it would have paid $1 billion now, with $2.3 billion per year for five years, with a minimum payment of $1.6 billion for the length of the agreement. Microsoft would have also purchased $3.9 billion dollars worth of shares and acquired $2.8 billion of Yahoo’s debt to pay shareholders a special dividend. This would have covered just Yahoo’s search business, leaving them their content business.
With yet another offer rejected, shareholders are demanding answers, and with their annual meeting coming up August 1st, they’re going to want blood to know why Yang keeps rejecting these proposals. Mr. Yang may very well find himself out of a job, with no money, if he keeps this up and doesn’t explain himself better to the shareholders.
It would be fascinating to know which part of this whole debacle was on Mr. Yang’s mind as he lunched with the Google co-founders in the pictures above. Sure it is impossible to know all of the finer details in a situation such as this, but for the life of me, I can’t figure out why Microsoft is so insistent in their desire to acquire the company, or why Yahoo is so blasted resistant to the concept. It’s obvious they aren’t going away, and the longer Yang and crew hold out, the worse this is potentially going to be for every one as Steve Ballmer, CEO of Microsoft, and Icahn get more and more aggressive.
Even from my far removed vantage point, I think it may be time for Yang to take the money and run with it.