July 23, 2008
After months of stop-start negotiations, Microsoft are now closer than ever to their goal of acquiring Yahoo.
The latest breakthrough came following Yahoo’s settlement this week with ex AOL chief and billionaire investor Carl Icahn.
Mr Icahn, who controls approximately 5 percent of the company with his ownership of 70 million Yahoo shares, has been a big supporter of the merger with Microsoft, going so far as sending Yahoo stockholders an open letter urging them a deal with Microsoft would be in the company’s best interests:
“Yahoo’s search business is in a precarious position and it needs to join forces with Microsoft to compete with industry leader Google Inc.”
Icahn’s letter stated.
“Google is going to put in billions and billions of dollars, and where’s Yahoo going to get that money?”
Mr Icahn’s letter also pushed for Yahoo’s Board of Directors to step down, including Yahoo’s CEO Jerry Yang. A joint restructuring proposal from Icahn and Microsoft was sent to Yahoo board members on July 11, with the company given only 24 hours to accept or reject it.
At first Yahoo board members resisted the proposal, but Monday saw a settlement between Yahoo and Mr Icahn that ended the proxy contest. The settlement included an agreement for one board member to step down, Mr Icahn to be appointed to the board and for eight other board members to stand for re-election.
With Yahoo pushing out their 2nd Quarter financial results late yesterday and a more pliable Yahoo board set to be elected at the company’s annual meeting on August 2, it appears that the announcement of a deal with Microsoft is imminent.