Yahoo! hits back at Icahn

'Your letter seriously misrepresents and manipulates the facts'

By John Oates • Get more from this author

Posted in Financial News, 5th June 2008 11:55 GMT

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Yahoo! has accused Carl Icahn of grossly misstating the facts about Microsoft's bid for the company and its subsequent actions.

Roy Bostock, Yahoo!'s chairman, denied that the company's staff retention plan was a "poison pill" designed to make a Microsoft takeover prohibitively expensive. He said payments would only be made to staff who had their jobs changed and were laid off. Bostock said the measures were put in place to keep Yahoo! staff onside during what would have been a lengthy period of uncertainty and regulatory review had the deal gone ahead.

Icahn is also accused of misrepresenting Yahoo!'s actions when it received Microsoft's bids. The letter said: "you accuse us of turning down a $40 per share offer and “sabotaging” a $33 per share offer. Again, this is patently untrue."

The letter also questions why Icahn believes Microsoft would be willing to return to negotiations to buy the whole company when it has made clear it is no longer interested in such a deal. The letter says that Microsoft and Yahoo! have met several times for discussions in recent weeks, but not to talk about a full acquisition.

The letter ends: "Conspicuously absent from your letter is any credible plan for Yahoo! other than a repetition of your insistence that the Company should sell itself to Microsoft. Indeed, your stated view that “the only way to salvage Yahoo! in the long if not short run is to merge with Microsoft” demonstrates that you have no other plan and causes one to wonder what exactly would happen to our Company if you and your nominees were to take control of Yahoo!."

The war of words is likely to continue until the company's general meeting on 1 August.

Yahoo! announced a slew of ad-related deals yesterday. It is partnering with WalMart for showing display and video advertising on the site. It has done a deal with Havas Digital to allow the agency to develop its advertising platform AMP!, which claims to make buying and selling online ads easier.

Yahoo! also announced an expansion of its Newspaper Consortium - it has now signed up 779 local US papers. ®

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