June 5, 2008 4:12 PM PDT

Next up, Yahoo's dog-and-pony investor show

Posted by Dawn Kawamoto

Yahoo investors got a taste Wednesday of the Yahoo-Carl Icahn dog fight. Next up--the dog-and-pony show.

Billionaire investor Carl Icahn and Yahoo, embroiled in a proxy fight, will be taking their respective fix-it strategy messages on the investor road show circuit once they file their definitive proxies with the Securities and Exchange Commission. These investor road shows will be crucial, as both parties seek to woo investors to vote for their opposing slate of Yahoo board members.

Yahoo declined to comment on when it will be filing its finalized proxy, and Icahn did not return calls for comment. But proxy solicitors note that generally, the finalized documents are submitted to the SEC shortly after the regulatory agency has reviewed the preliminary version and issued comments. The 10-day deadline for the SEC to issue comments has passed for both parties.

When meeting separately with investors, Icahn and Yahoo will more than likely bring some of their director nominees. Icahn's 10-member slate includes such notable folks as Mark Cuban, founder of Broadcast.com, while Yahoo has a 9-member slate that is running for re-election to a one-year term.

Icahn, in his road show message, is expected to reiterate his previous laments that Yahoo's board is entrenched and blew a deal to sell the company to Microsoft for $33 a share. The billionaire investor still holds out hope that Microsoft will make another offer for Yahoo, but it considers the odds less likely, if the current Yahoo board remains in place. His dissident board will need to make a compelling argument as to why it is qualified to run the company, should a sale to Microsoft fail to materialize.

Although Yahoo and Microsoft are currently in talks to sell or partner Yahoo's search business with Microsoft, no deal has yet been struck.

The August 1 shareholder meeting would likely be delayed once again, if Yahoo and Microsoft are still in discussions for a partial or 100 percent sale of the company prior to mid-July, according to one proxy solicitor.

That's because Yahoo would be hesitant to take a risk that a potential promise of a deal would be enough to sway any disgruntled investors into voting for its slate of directors, the proxy solicitor said.

Any delay would likely be announced prior to the influential proxy advisory firm ISS Governance Services, making its recommendation on which proxy slate to vote for, the proxy solicitor said. ISS advises institutional investors such as pension funds, mutual funds, and asset managers on how to vote on proxy issues.

"Yahoo will want to delay the meeting," the proxy solicitor said. "There's no free pass. Investors won't stand to wait another year (to remove Yahoo's current board), if there is no buyout announcement by then."