Carl Icahnâ’s battle to replace the board of directors at Yahoo! has gained momentum. There are many people who support his stance on the Microsoft takeover. These supporters are now rallying behind him and buying shares of Yahoo!
Amongst the supporters, oil investor T. Boone Pickens, has bought 10 million shares, a hedge fund, Third Point, led by activist Dan Loeb, which had 1 million shares of Yahoo! in its possession on March 31, now has more than 5 million shares and may collect up to 10 million shares. And yet another hedge fund, Paulson, has 50 million shares of Yahoo!
It is believed that Icahn’s supporters now have over 80 million shares, that is more than 5% of Yahoo! between them, and Mr. Icahn himself has the option of purchasing another 49 million shares.
Although Microsoft has withdrawn its offer to acquire Yahoo! at $33 per share, the two firms are in talks with each other to arrive at a working relationship that would be mutually beneficial to both. The shareholders of Yahoo! are annoyed at the board’s decision because, according to a source, “they haven’t laid out a game plan that gets you to $33 to $34 per share on a standâ€“alone basis”.
Yahoo! is trying to fend off Icahn’s advances to replace the board by delaying their 3 July 2008 shareholders meeting to the end of the month. In the meantime the current board of directors at Yahoo! need to either fix an alternative deal with Microsoft buying only part of the company or an advertising agreement with Google that could inject $1 billion revenue per year.