Carl Icahn lays out 5-point game plan for Yahoo

This post was updated at 9:59 a.m. PDT with Yahoo's response.

After a one-day lull in the Yahoo-Icahn war of words, billionaire investor Carl Icahn on Friday listed his five-step game plan for the company, should his dissident slate of directors succeed in unseating Yahoo's current board at the August 1 shareholder meeting.

In a letter to Yahoo chairman Roy Bostock, Icahn states:

You asked, "What exactly would happen to our company if you and your nominees were to take control of Yahoo?" I will give you my perspective on that.

First, I would work to have the board replace your "poison pill" severance plan with an acceptable alternative.

Second, I intend to ask our new board to hire a talented and experienced CEO (attempting to replicate Google's success with Eric Schmidt) to replace Jerry Yang and return Jerry to his role as "Chief Yahoo." Indeed, it was much speculated that Jerry would serve in the CEO role temporarily until a permanent CEO was hired after the board asked Terry Semel to resign.

Third, I intend to ask our new board to inform Microsoft that unless any alternative transaction can ensure a $33 or higher stock price (of which I am skeptical), all talks of alternative transactions are over.

Fourth, I will ask our new board to offer publicly to sell Yahoo To Microsoft in a friendly and cooperative transaction.

Fifth, to the extent Microsoft does not want to make a proposal, I will ask our new board do a deal on search with Google, but only if it contains termination provisions that would in no way impede a subsequent acquisition by Microsoft.

Yahoo, meanwhile, fired back a response that characterized as Icahn's ideas as a no-go.

Here's what Yahoo had to say:

Leaving aside Mr. Icahn's inaccurate interpretation of our retention plan, we again note that he has no credible plan to operate Yahoo. We believe that Mr. Icahn's suggestion that we cancel our retention plan would have a destabilizing impact on Yahoo and would clearly not be in the best interests of our shareholders.

[Renegade Knight]

1) Poison Pills get in the way of Icahn main busines. They are handy if shareholders actually like owning Yahoo instead of Microhoo. Poison pills get in the way of making a quick buck.
2) In the world of CEO's any that are available that have the experience are available from running a company into the ground. The real talent is employeed, or doesn't have a pedigree yet. Oh wait, they needa CEO willing to sell out for a quick buck for Icahn...
3) A handy price for a quick buck. Not the stuff that Yahoo owners in it for the long haul really need. Alas Icahn's about the quick buck and not running comanies to do well in the long run.
4) We are back at the quick buck.
5) Just in case we can't make a quick buck we will entertain business ideas that allow the company to grow on it's own...but we will create a poison pill and sour the deal by attaching provisions that require us to be able to make a quick buck.

[rexworld]

Poison pills are bad all around. They do not help the shareholders, who are supposed to be the main focus of any public company's actions. Even if Icahn doesn't win, the board still should revoke the poison pill.

[rmva]

"Sixth, pray that some bigger fool comes along to bail me out of my idiotic investment in this stock."

[Arrgster]

Welcome to the dangers of going public.

[GadgetDon]

So what's his plan?

(1) Remove the obstacle to selling out to Microsoft
(2) Fire Yang and bring in a CEO who will bend over and sell to Microsoft
(3) Tell Microsoft that the only deal they'll do with Yahoo is a sellout
(4) Sell to Microsoft
(5) If Microsoft doesn't want to buy, do a temporary deal structured so we can sell to Microsoft.

Sounds like Yang and Bostock are right...Icahn has no plan except for selling Microsoft to Yahoo, and no interest in anything except selling it out, and will be utterly incompetent if it turns out that they can't sell for a price they want.

[GadgetDon]

One more thing...not only does Yang and Bostock and other Yahoo shareholders know that Icahn has no plan other than sell to Microsoft, so does Microsoft. When one side in a negotiation has no fallback if the negotiations fail, they're the side that gets the worst side of the bargain.

[Remo_Williams]

Ahh, but therein lies the true error. A company does not exist primarily for the stockholders, it exists for its customers first, employees second, and shareholders third. The "stockholder first" concept is a convenient spin propagated by the likes of Icahn to justify their greed. Stockholders should be the very last consideration of a company; in fact, I'd go so far as to publicly frame a tactful way of saying, "Buy our stock but we're running this show, not you, and if you don't like it, don't buy."

Really, Icahn should be told to take a hike, and if I could speak for Mr. Yang, I'd tell him exactly that. With heavy cursing and physical threats of violence. Icahn is a deplorable human being.

-R

[winstein]

I give Microsoft credit for backing out gracefully. It does not make any sense for Microsoft to own Yahoo without Jerry Yang, and Microsoft does not want to buy Yahoo without Jerry Yang. Icahn just wants to get rid of his Yahoo shares now.

[Dalkorian]

A few others here have hit the nail on the head. Icahnt is just interested in selling out to M$ for a quick buck. Yahoo will be no longer and he couldn't care less, as long as he gets to make a run to the bank. Disgusting.

[simplelifer]

Carl Icahn is the cancer to Yahoo! and others alike. A man who shows how much he loves God and go to church faithfully every weekend, then come home to beat up his wife and children after Sunday worship. Carl Icahn, there is no place for man like you in the world of great innovations. You and your billions are the prove that there is indeed an evil in the world. Carl Icahn, the devil in the holy father's clothing.

I would always trust Carl "I am the benefactor" Icahn. This man is definitely out for number one. Proof, He bought TWA, remember them, he then swallowed up another profitable airline, OZARK, they were regional, but successful. After he had sucked TWA dry of its money, piled up vast amounts of debt, at a time when all the majors were doing quite well, he got the employees to give up a lot, promising them a "Profit Sharing" program, just when TWA was starting to make a profit again and climb out of debt, and the employees, remember them, they invested in Carl's plan, He sold TWA, but hamstringed them by rediculous greedy self serving restrictions, He could sell seats at an extreme discount, and make a huge profit for himself. He is known as a person who maximizes stockholder value, the problem is its only for him.