Yahoo’s (YHOO) unexpected concurrence to appoint Carl Icahn to its board of director, ends essentially Mr. Icahn’s acrimonious campaign to replace Yahoo’s nine directors at the company’s annual meeting Aug. 1.
Under the terms of the agreement ; Yahoo! board will be expanded to 11 members. Icahn will have three seats, including his own and two remaining seats will be selected by Yahoo! from a list of his recommendations. All but one member of the Yahoo! board – from among eight members of Icahn’s original slate of nominees – is staying on.
In addition, eight members of Yahoo’s current board of directors – which so far has shown strong opposition to his agenda , primarily consisting of negotiating a sale to Microsoft, and also ousting Yahoo CEO Jerry Yang – will stand for re-election at the Aug. 1 shareholders’ meeting.
Icahn, appeared satisfy with the agreement stating he was very pleased that this settlement will allow him “to work in partnership with Yahoo’s board and management team to help the company achieve its full potential”. However, it’s obvious he wants to see Yahoo! do a major deal. That’s why he emphasized that the sale of the whole company or the sale of its search business is the “right transaction and must be given full consideration.”
Whether the inclusion of Mr. Icahn and his associates on Yahoo’s board will push Microsoft to reconsider its May offer of $33 per share for the whole co., is unclear at the moment. Mr Icahn paid nearly $25 a share for his 5% Yahoo! stake. YHOO closed on Monday @ $21.67 -$0.78 (3.47%).
If the ‘Icahn truce’ was – technically speaking, a win for the Web portal, is yet to be seen and at best, premature at this point. However, knowing Icahn’s style of hounding CEOs while enriching shareholders – personally, I wouldn’t bet on it.
Let’s keep in mind, besides his disruptive influence – Icahn currently, enjoys more credibility with Yahoo shareholders because of his insistence on the argument – that ousting of Yahoo’s board is the only truly rational decision and the only way to salvage a deal with Microsoft (MSFT). So, the persisting question is whether Yahoo may come to regret its move. Eventually, we will find out.
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