Milk Microsoft for $49.5bn Icahn Tells Yahoo

09 June 2008

NEW YORK: From his 47th floor eyrie on Manhattan's GM Building – an apt locale for one of the planet's most fearsome financial raptors – Carl Icahn (pictured) has issued his latest diktat to Yahoo chairman Roy Bostock.

'Accept a takeover offer of $49.5 billion (€31.4bn; £25.13bn) from Microsoft' - a figure some $2 billion higher than the software titan's previous bid for Yahoo. 

The billionaire financier, corporate raider, and private equity investor rarely emerges from any deal undrenched in dollars. Yahoo is unlikely to be an exception.

And having amassed some ten million Yahoo shares with options to acquire an additional 49m, Icahn has every incentive to talk-up that stock's value.

If his 'advice' goes unheeded – as it probably will – and a deal isn't struck before the company's annual meeting on August 1, Icahn will try to replace Yahoo's complete board with his own nominees and despatch co-founder/ceo Jerry Yang to the departure lounge.

Yahoo's sole comment on Icahn's latest ploy? That the internet giant would be "ill-advised" to publicly display the cards it holds close to its chest..

But Icahn's psychology can rarely be faulted.

As Revolution managing director Peter Falvey notes: "[Icahn's sales figure] keeps the pressure on Yahoo. It could also act as a sort of fig leaf so they can start talking about a sale again without it seeming like they are crawling back to Microsoft.

"They can now say to Microsoft, 'Look, we need to have these conversations now.' "

Data sourced from Associated Press; additional content by WARC staff