Activist investor Carl Icahn has resigned from the board of Yahoo, and is praising both CEO Carol Bartz, who just presided over a quarter of improved earnings, as well as the rest of the company’s board for “acting so responsibly” in conjunction with the search transaction with Microsoft that he advocated. Icahn’s resignation was to be expected in the wake of Yahoo and Microsoft inking their deal to collaborate on search (and now that talks of a Microsoft buyout of Yahoo are done), but still marks the end of a particularly political Silicon Valley saga.
According to Icahn’s resignation letter, addressed to the board:
“I believe the Microsoft transaction will provide great long term benefits, the potential of which many still do not understand…I don’t believe that it is necessary at this time to have an activist on the Board of Yahoo! and currently, my attention is focused on other matters. As a result, I do not presently have the time that is necessary to devote to the business and affairs of Yahoo! required if a board member is to fulfill his fiduciary duties to the shareholders.”
Icahn has a long-standing pattern of diving into M&A situations between companies, especially high-profile deals, where he typically has a very targeted agenda. He typically scoops up a large number of shares of one of the companies involved, then adds political maneuvering with the board of directors into the mix.
In 2007, Icahn accumulated a large number of shares in Motorola, and pressed for a seat on its board, but was rebuffed by shareholders. He continued to dive in and out of dealings with the company into 2008. That same year, Icahn disclosed that he owned more than 8 percent of the shares in BEA Systems, which Oracle was seeking to acquire. In Icahn’s share disclosure filing to the SEC, he strongly urged that BEA put itself up for sale, and his share acquisitions and actions toward the boards of directors played a significant role in Oracle’s eventual acquisition of the company. It’s also part of Icahn’s pattern in these deals that once he’s done fulfilling his agenda, he’s outta there.
In the saga of Microsoft and Yahoo — a story that was discussed, and then discussed again and again — it’s worth remembering the roller coaster ride that Yahoo shareholders were put on. Microsoft’s offer to buy the company escalated to a price of nearly $35 a share at one point; they ended Friday’s session at $17.22. Icahn’s involvement in an eventual search deal between the companies is just a footnote compared to that series of events that the shareholders in Yahoo endured.