Stepping up his one-man PR offensive, activist investor Carl Icahn described as "completely disingenuous" Yahoo's contention that disagreements over price torpedoed acquisition talks with Microsoft.
Icahn, a veteran negotiator, broke an uncharacteristically long silence by talking to the media this week to rally anti-Yahoo opinion. Yesterday it was The Wall Street Journal, today it was CNBC.
"Sue Decker says today 'We're doing everything we can but the price isn't high enough.' It's not high enough because of (a proposed severance) package," Icahn said in an interview on the CNBC program, Fast Company. "And it's a bit worse than you're alluding to because one of the things that Microsoft, I would imagine, needs here is the workforce. And how do you then go in and tell them (Microsoft's) paying $45 billion but we're incentivizing this workforce that you want to leave? I mean, it's sort of--it's sort of incomprehensible what they're doing here."
The proposed Yahoo severance plan, which comes out to roughly $1.60 a share, was seized upon by critics who said it presented an obstacle to any potential deal with Microsoft. In a letter he sent today to Yahoo Chairman Roy Bostock, Icahn demanded that the board rescind the severance plan, which he described as "the largest impediment to a Microsoft deal." Icahn said that decision would free up approximately $2.4 billion and possibly even more that could be added to the bid.
In the meantime, Icahn used his CNBC appearance to deride Yahoo's management as lacking accountability. On Monday, he again urged the dismissal of Yang, who Icahn said stood in the way of a fruitful negotiation with Microsoft. In mid-May, he filed a proxy slate to unseat Yahoo's board.
"I tell you I've rarely seen (a management team) where the company has gone to such lengths to entrench themselves and it's a sad commentary."
At the same time, Icahn remained unenthusiastic about any of the alternative deals being bruited about between Yahoo and Microsoft in lieu of an outright acquisition.
"Sometimes, you have to have patience," Icahn said. "But I believe if it's not this month--it'll be six months from now. But it's crazy for the company now to do this alternative deal and give the store away because obviously, an alternative deal is a poison pill. Because once you've done an alternative deal and given search to Microsoft, you don't need Microsoft to buy you anymore. So, that would be a poison pill."
Icahn also said a partial sale would leave Yang and the current board in charge, which he said "would be terrible for shareholders."