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SAN FRANCISCO - Yahoo fired back at corporate raider Carl Icahn on Thursday, saying he lacks understanding of the Microsoft takeover bid and should not follow through on a vow to oust Yahoo's board.
Yahoo posted a public response to an open letter that the billionaire sent them saying he plans to unseat the board of Yahoo and reopen merger talks with Microsoft, which he said had been "completely botched" by the Internet firm.
"Unfortunately, your letter reflects a significant misunderstanding of the facts about the Microsoft proposal and the diligence with which our board evaluated and responded to that proposal," Yahoo board chairman Roy Bostock wrote in an open letter to Icahn.
"We do not believe it is in the best interests of Yahoo stockholders to allow you and your hand-picked nominees to take control of Yahoo for the express purpose of trying to force a sale of Yahoo to a formerly interested buyer who has publicly stated that they have moved on."
Icahn said in his letter that he had acquired 59 million shares of Yahoo and formed a 10-person slate which will stand for election against the current board.
"It is unconscionable that you have not allowed your shareholders to choose to accept an offer that represented a 72 percent premium over Yahoo's closing price of 19.18 dollars on the day before the initial Microsoft offer," Icahn said in the letter.
He added that in the past week, "a number of shareholders have asked me to lead a proxy fight to attempt to remove the current board and to establish a new board which would attempt to negotiate a successful merger with Microsoft, something that in my opinion the current board has completely botched."
Icahn said a combination between Microsoft and Yahoo "is by far the most sensible path for both companies."
Earlier this month, Microsoft withdrew its proposal for Yahoo, saying the struggling Internet pioneer refused to budge despite the software giant upping its offer to nearly 50 billion dollars.
Icahn, a 72-year-old activist shareholder who has targeted companies ranging from airline TWA to General Motors, was ranked number 46 by Forbes magazine in its list of global billionaires, with a net worth of 14 billion dollars.
"He is probably going to be the Yahoo board's worst nightmare," Silicon Valley analyst Rob Enderle said of Icahn.
"He is tenacious, smart, and knows how to play the media. I wonder how many of the board members have been through this as many times as he has."
Some companies faced with a credible threat from a daunting corporate raider consider paying them to retreat instead of engaging them in battle, Enderle said. - AFP/ir
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