Business | Technology

Channel Sponsor

Icahn's proxy fight with Yahoo puts Microsoft in driver's seat

Two weeks after Microsoft abandoned its pursuit of Yahoo, a proxy fight launched by activist investor Carl Icahn has put Microsoft in the driver's seat.

  • Reuters
  • Published: 23:39 May 16, 2008
  • Gulf News

Seattle: Two weeks after Microsoft abandoned its pursuit of Yahoo, a proxy fight launched by activist investor Carl Icahn has put Microsoft in the driver's seat.

Icahn wants Yahoo to reopen talks with Microsoft, saying the company's board had acted "irrationally" when it rejected Microsoft's $47.5 billion buyout offer. Microsoft walked away from the deal earlier this month when Yahoo rejected its final offer of $33 a share, holding out for at least $37 a share.

"With Yahoo being pushed by shareholders to get back to the table, you would think it's just what Microsoft wanted," said Marc Weingarten, an attorney with Schulte Roth & Zabel.

Microsoft has declined to comment on Icahn's actions. A company spokesman repeated the same message that its executives have said over the last two weeks: it had moved on.

Still, Icahn has opened the door for Microsoft to swoop in as white knight and buy Yahoo in a friendly deal without instigating the proxy battle it had threatened.

"Microsoft can come directly back to the Yahoo board and save them from the proxy contest, save them from all the criticism that they are getting," said Weingarten.

Microsoft's motivation for buying Yahoo - to create an online advertising powerhouse to rival Google - remains intact. The alternatives of a build-from-within strategy and a piece-by-piece acquisition strategy could bring significant risk.

Mergers and acquisitions experts said it would be wise for Microsoft to lie low and see if pressure from Icahn and other activist investors will prompt Yahoo's board to turn to Microsoft with hat in hand.

  • Rate this article
  • Average reader rating (0 votes) 0 Stars
Tools

Emailing an article to friend is a simple way to share a news item. Your friend will receive an email with your name and email address as well any personal message you choose to send.

The information you provide on this page will not be used to send unsolicited emails.

This service is not intended to encourage spam, and action may be taken against individuals who maliciously enter personal details of another individual.

Share this article

More from Technology

  1. 10 best internet moments of the decade

  2. Microsoft continues anti-piracy efforts in the UAE

  3. Acer retains top ranking despite decline in market

  4. When the Web lives worldwide

All articles in Technology

More from Business

Gulf News
Popular in Business
Airlines in the region
Budget travel

Airlines in the region

Take a pictorial look at some of the budget airlines in GCC

Business Editor's choice