Icahn wins another major backer
As the dust settles from the breakdown of full acquisition talks between Microsoft (MS) and Yahoo, investor opinion appears to be hardening against Yahoo CEO Jerry Yang and the current Yahoo board, and in favour of Carl Icahn’s alternative slate.
Barron’s today published an open letter dated 14 June from Mark Nelson on behalf of Mithras Capital, an investment firm which holds 1.7 million Yahoo shares, informing the Yahoo board that Mithras will vote for Carl Icahn’s slate of directors at the company’s 1 August AGM.
Nelson created and took public Ovid Technologies, an internet search pioneer, and sold it in 1998 because “the Board and I came to the conclusion that selling the company was the best way to fulfil our fiduciary responsibility to maximize value for all shareholders.”
“This duty takes precedent over a founder’s potentially deep and personal sense of ownership,” wrote Nelson. “Mr Icahn obviously understands what ‘fiduciary duty’ means, a meaning that eludes the current Yahoo Board.”
Nelson slammed the Yahoo board for snubbing the alternative proposed by MS, reported previously, which he judges to be “clearly superior to the alliance forged with Google.” The MS offer includes buying a 16 percent stake in Yahoo for $35 per share and paying $1 billion compensation for the traffic acquisition cost.
Boiled down, Mithras is saying that Yang’s ego has been the principal obstacle to a deal that was clearly in the best interest of Yahoo shareholders. MS’s offer of a premium $35 a share to insurgent Yahoo shareholders appears to be creating a bandwagon effect for Icahn’s proposals.
It looks like MS may yet walk away with the only bit of Yahoo it really wanted at a fraction of the price it was originally prepared to pay, and without the attendant hassles of dealing with the rest of the company.
