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Icahn Says Ballmer Still Wants Yahoo

Icahn Says Ballmer Still Wants Yahoo

Billionaire investor Carl Icahn is busily leading a shareholder revolt against Jerry Yang and Yahoo‘s current management, irritated that the company turned down a $45 billion-plus payday to sell the company to Microsoft. Icahn’s plan to rectify the situation includes replacing Yahoo’s board of directors with his own slate at the company’s shareholder meeting in August, then taking Yahoo back to Microsoft and trying to make a deal.

To bolster his position, Icahn has issued an open letter to Yahoo shareholders in which he claims to have spoken with Microsoft CEO Steve Ballmer several times over the past week, and quotes Ballmer as saying Microsoft would still be interested in buying Yahoo’s Internet search business—or even acquiring the whole company—but wasn’t willing to try working out a deal with Yahoo’s existing board. But if a new board were installed, Microsoft would be willing to enter negotiations “immediately.”

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“Steve made it clear to me that if a new board were elected, he would be interested in discussing a major transaction with Yahoo!, such as either a transaction to purchase the “Search” function with large financial guarantees or, in the alternative, purchasing the whole company,” Icahn wrote in the letter.

In a surprising move, Microsoft has gone out of its way to essentially confirm the contents of Icahn’s letter. The company noted that it’s premature to talk about any details of a possible transaction, Microsoft believes its June offer for Yahoo’s search business was a good deal, and “we therefore welcome interest by Mr. Icahn in pursuing this and other discussions.” Microsoft also indicated it would be willing to enter into negotiations immediately if a new board is elected at Yahoo’s shareholder meeting.

Microsoft announced its unsolicited takeover offer for Yahoo in February 2008; if the company enters into negotiations to buy Yahoo’s search business—or the entire company—the dance between the two technology giants would have gone on for more than six months…hardly the speedy and friendly transaction Microsoft envisioned at the start.

UPDATE: Yahoo has fired back with its own public response to Icahn’s open letter, noting that they have already gone back to Microsoft about a buyout, and that Icahn’s proposal that Yahoo sell Microsoft it’s search business for a price to be determined in a “future negotiation” between a new Yahoo board and Microsoft wouldn’t be in the best interest of Yahoo shareholders. “If Mr. Icahn has an actual plan for Yahoo beyond hoping that Microsoft might actually consummate a deal which they have repeatedly walked away from,” Yahoo wrote, “we would be very interested in hearing it.”

Geoff Duncan
Former Digital Trends Contributor
Geoff Duncan writes, programs, edits, plays music, and delights in making software misbehave. He's probably the only member…
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