Tags:Motorola

BILLIONAIRE investor Carl Icahn is moving ahead with plans to run a dissident board slate at Yahoo Inc in a bid to force the Internet company to sell itself to Microsoft Corp, insiders told Reuters on Wednesday.

Icahn, who has amassed a large stake in the Internet company over the last week, has lined up at least 12 potential board candidates and could announce the slate any moment, the insiders said. The deadline for nominating a dissident slate was yesterday for the July 3 annual meeting.

Frank Biondi, a veteran media executive and former head of Viacom Inc who has worked with Icahn on activist campaigns at Time Warner Inc and Motorola Inc, has agreed to be a nominee, the insiders said.

Icahn, 72, has a stake of 50 million Yahoo shares, the Wall Street Journal reported this week. That''s equal to about 3.6 percent of the shares outstanding and would be worth about US$1.36 billion, based on yesterday''s closing price.

Microsoft, which offered a sweetened bid of US$33 per share, or US$47.5 billion, has given no indication that it would revive the talks, whether or not a new slate is elected, posing a significant risk to Icahn''s plans.

Since Microsoft dropped its offer, Microsoft executives have reaffirmed publicly they are no longer interested in pursuing Yahoo. On Wednesday, Microsoft declined comment.

Probable

Ryan Jacob, portfolio manager of the Jacob Internet Fund, which holds around 150,000 Yahoo shares, said Icahn will probably prevail in his effort to win board seats.

"There''s a reasonable chance that Icahn can be successful," said Jacob. "There''s a lot of shareholder unhappiness right now, including ours. It''s encouraging because there''s the chance that they can be more successful in consummating a transaction with Microsoft."

It was unclear if Icahn plans to run a full slate of 10 new directors at Yahoo, or a "short slate," or non-control position. The details have yet to be worked out, sources said.

In previous proxy battles, Icahn has nominated a large slate and settled for a smaller slate after negotiations with the company. In a battle with Motorola Inc this year, Icahn put forth a slate with four nominees but ultimately settled with the company for two board seats.

Icahn reached out to virtually all the candidates on a Microsoft-sponsored board slate that the software company withdrew this month, sources said.

Icahn, through friends, approached Microsoft''s board about coming back to the negotiating table, the New York Times said. He was told that the software maker had "moved on," the newspaper reported.

"It didn''t sound like the discussions between Icahn and Microsoft were as fluid as one would hope," said RBC''s Sandler. Icahn is "launching this potential proxy battle without the assurance from Microsoft that they would come back to the table at some point."

"It''s handing the company over to an entirely different team," said Bruce Goldfarb, partner in Okapi Partners, a proxy advisory firm.



Source:Reuters