In settlement, Icahn to join Yahoo board

Yahoo has reached a settlement with activist investor Carl Icahn, who will join the Internet company's board.

Icahn, who had proposed his own slate of board members, was agitating for the company to reach a deal to sell all or part of the company to Microsoft. Icahn and Microsoft officials had previously stated that they could not work with the existing Yahoo board.

As part of the settlement, Icahn, who owns about 68.7 million shares, or 4.98 percent of Yahoo common stock, has agreed to withdraw his nominees for consideration at the annual meeting and to vote his Yahoo shares in support of the board's nominees. Board member Robert Kotick will not seek re-election.

Eight members of Yahoo's current board of directors will stand for re-election at the scheduled shareholder meeting next month: Roy Bostock, Ronald Burkle, Eric Hippeau, Vyomesh Joshi, Arthur Kern, Mary Agnes Wilderotter, Gary Wilson, and Jerry Yang.

The board will expand to 11 members, adding Icahn and two other nominees from Icahn's slate.

It was not immediately clear whether the board would continue negotiations with Microsoft.

"While I continue to believe that the sale of the whole company or the sale of its search business in the right transaction must be given full consideration, I share the view that Yahoo's valuable collection of assets positions it well to continue expanding its online leadership and enhancing returns to stockholders," Icahn said in a release. "I believe this is a good outcome and that we will have a strong working relationship, going forward. Additionally, I am happy that the board has agreed in the settlement agreement that any meaningful transaction, including the strategy in dealing with that transaction, will be fully discussed with the entire board before any final decision is made."

[inachu]

I am sure if Carl Icahn can't sell yahoo to Microsoft he will make sure yahoo will be sold off to China or India or Russia.

[jamalystic]

So where does this leave the Microsoft-Yahoo saga? I'm pretty sure MSFT won't buy Yahoo as long Yabg is in charge! Now i'm hearing that Microsoft is off to buy AOL, what the heck is wrong with MS?Why Microsoft Should Forego the Acquisitions Route(http://www.internetevolution.com/author.asp?section_id=625&doc_id=158193&F_src=flftwo)

[Penguinisto]

Well now... that sorta pulls the rug out from under MSFT and their plans.

It also turns Icahn into just a board member (instead of someone with a whole slate of board members to use as puppets). The funny thing is, he probably thinks he got something powerful, whereas it is likely that instead he wound up being someone that the rest of the board can safely ignore.

[Vegaman_Dan]

Three people on the board, you mean. Icahn and two others of his choosing. Now I don't believe for a minute that 100% of the existing board was all pro-Yang, so you'll need to add those unknown people as well. Now that Icahn is in place, there will be no secrets as to what is going on. I know you like to turn everything into a Microsoft bashing situation, but this is a case where I think Yahoo just screwed up by letting Icahn on board. Revolts are much easier from within than outside. They just made it a whole lot easier for Icahn and whomever else he has deals with. Microsoft, whom I think should stay away from the whole deal in the first place as this is a poisoned company as there ever has been one, would be wise to let the board deal with Yang internally. Yang's days are numbered, that much is very clear.

[Penguinisto]

3 members out of 11... while the other 8 are pretty much going to demand that Icahn look out for their long-term interests as well, else he gets ignored.

Keep your friends close, and your enemies closer. Icahn will become pretty much impotent by comparison.

As for the MSFT angle? Please... Icahn was not much more than their puppet in trying to force Yahoo to sell out to MSFT. Now MSFT gets nothing out of the deal (at least not for the short term).

[rapier1]

Its unlikely that Icahn will be put into a corner to play with himself. The man personally owns 5% of the company. Thats probably more than Yang owns at this point with dilution. No, he's not going to be ignored and its unlikely that this will close the door on Microsoft deals. More than likely it will mean exclusive partnership deals rather than outright purchase and dismantling. Thats good enough for MSFTs purposes.

[Penguinisto]

Actually, it won't be "good enough" - MSFT is hampered by having to pay Yahoo patent royalties on many of MSFT's core online activities. As long as Yahoo still stands, MSFT is trapped into paying up - and will only have to pay more if they increase their online presence. Icahn can't get enough board members to give up that kind of cash cow, and no other real options are left to him, even in "partnerships".

[Renegade Knight]

Well heck. Throwing a temper tantrum and calling the exising board names seems to work. Now the dude is staff.

Now Yahoo has made a mistake.

[Steve Hirst]

Monday Morning Humor ROFL

[TV James]

Takes money to make money... directors at most companies earn over $100k a year for attending a few meetings, voting. I know I'm simplifying, but I own small amounts of about 20-30 stocks and the same people keep showing up over and over again. I wish *I* could badger my way onto a board. Maybe in 20-30 years....

[The_Decider]

What a foolish move if this is true. Icahn is an idiot who has no business on any tech company board. Icahn losing in August is all but assured, why cave in to the worthless moron?

[Vegaman_Dan]

He was just brought in to be on the board. Thinking that he will then be ousted in August seems ridiculous for Yahoo. Or did I misunderstand you?

[The_Decider]

You misunderstood.

He was sure to lose in his proxy fight in August, so what is the point to bowing to this greedy scumbag that brings nothing of value.

[taphilo]

Keep your friends close - and your enemies closer.

Yahoo board motto.

[azareus]

activist investor joins board, interesting change. But board alternates not added. What will this mean to yahoo?
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