Yahoo board faces proxy fight

15 May 2008

Yahoo is facing a proxy contest for control of the company, after a private shareholder submitted an alternate group of directors.

Billionaire investor Carl Icahn, thought to be the world's 14th richest man, today sent an open letter to Yahoo chairman Roy Bostock in which he detailed a 10-person slate to stand for election against the current Yahoo board. The company's shareholders will be called to vote on the alternative appointments at a shareholder meeting due for 3 July.

Icahn stated in his letter that he was "perplexed" by the board's response to Microsoft's January takeover bid, adding: "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… on the day before the initial Microsoft offer."

There have been reports of widespread frustration among Yahoo shareholders, many of whom are said to be angry that the current board failed to reach an agreement with Microsoft.

"During the past week, a number of shareholders have asked me to lead a proxy fight to attempt to remove the current board," Icahn wrote, adding that his proposed board "would attempt to negotiate a successful merger with Microsoft, something that in my opinion the current board has completely botched".

Speaking to the BBC, investor Eric Jackson – an outspoken critic of the Yahoo board's handling of Microsoft's approach – said: "I want to send a message to all [the] board directors that they are accountable and need to be replaced."

"Yahoo's stock has essentially been flat for the last four years while the market has gone up over 30% and Google has gone up 440%.

"The comparisons are stark and the board has not been doing its job," he added.

Category: Google, MSN, Search engines, Yahoo