May 16, 2008 — (WEB HOST INDUSTRY REVIEW) — According to reports released Friday, Roy Bostock, the chairman of Yahoo! (yahoo.com), has released an open letter responding to Carl Icahn’s efforts to launch a proxy battle and “seek control of Yahoo!’s board of directors.“
Yesterday, billionaire investor Icahn told Bostock he would fight to replace Yahoo!’s current group of directors to reopen buyout talks with software giant Microsoft (microsoft.com).
In Bostock’s letter, the chairman disputes Icahn’s claim the board acted “irrationally” and says the current group of directors “remains the best and most qualified group to maximize value for all Yahoo! stockholders.”
“We do not believe it is in the best interests of Yahoo! stockholders to allow you and your hand-picked nominees to take control of Yahoo! for the express purpose of trying to force a sale of Yahoo! to a formerly interested buyer who has publicly stated that they have moved on,” writes Bostock. “Please may I remind you that there is currently no acquisition offer on the table from that company or any other party.”
Bostock said directors considered Microsoft’s proposal carefully and after the first offer of $31 a share, directors met to discuss this and other offers 20 times.
“The record of our efforts to engage Microsoft in meaningful discussions is unequivocal,” writes Bostock. “Throughout this process our board kept an open mind and an open ear.”
Bostock says the board also met with several large shareholders to get their views and make it clear the company was committed to maximizing stockholder value.
Then on May 2, Microsoft made an oral offer of $33 a share, which Bostock points out was never delivered in writing and didn’t include details of a cash/stock mix. The board told Yahoo!’s CEO Jerry Yang to tell Microsoft they would be prepared to do a deal at $37 a share. Within hours, says Bostock, Microsoft decided to walk away from the negotiating table, saying it was “moving on.”
Bostock ends the letter by saying that Yahoo!’s business continues to perform well and the board is continuing to “actively and expeditiously” look for other ways to maximize stockholder value.
“None of the alternatives we are considering would preclude us from entering into a transaction with Microsoft or any other party,” writes Bostock.
