Blog Post

Yahoo Settles With Carl Icahn; Icahn To Control 3 Of 11 Seats; Jonathan Miller Likely On

imageSo much for an exciting battle… Yahoo (NSDQ: YHOO) has announced a settlement with Carl Icahn that will see Icahn himself elected to the company’s board at the upcoming meeting. Following the August 1 shareholder meeting, the board will then be expanded to 11, with the extra two board members appointed by the board from a list recommended by Icahn. That list includes the eight remaining members of the previous Icahn slate, which includes Mark Cuban, plus Jonathan Miller of Velocity Interactive. All told, Icahn will control 3 of the 11 seats. Existing board member Robert Kotick will stand down to make way for Icahn.

In recent days, Icahn’s chances for a full board victory began to grow quite dim. A never ending rally of back and forth press releases, culminating in a last-ditch deal with Microsoft (NSDQ: MSFT) last weekend confirmed that Icahn had no plan B, and so would be fully at the mercy of Microsoft, were he to have won. Last week’s announcement from Legg Mason’s Bill Miller, that he would support the incumbent slate, was a major blow. Miller did, however, support the idea of a compromise board. Also, the idea of a compromise was floated by activist investor Eric Jackson, though it was seen as unlikely. It’s not clear how long this deal has been in the works, but it was just Friday that Yahoo put up a new page devoted to promoting its campaign and trashing Icahn (speaking of which, how long will they keep it online?). Jerry Yang even sent a video around to employees tell them about it. Meanwhile, shares of Yahoo are ticking downward slightly in pre-market action down over 3 percent in early action.

Icahn’s statement from the release: “I am very pleased that this settlement will allow me to work in partnership with Yahoo!’s Board and management team to help the Company achieve its full potential. While I continue to believe that the sale of the whole Company or the sale of its Search business in the right transaction must be given full consideration, I share the view that Yahoo!’s valuable collection of assets positions it well to continue expanding its online leadership and enhancing returns to stockholders. I believe this is a good outcome and that we will have a strong working relationship going forward. Additionally, I am happy that the board has agreed in the settlement agreement that any meaningful transaction, including the strategy in dealing with that transaction, will be fully discussed with the entire board before any final decision is made.” Full release after the jump.

Icahn Settlement Release: Yahoo! Inc. , a leading global Internet company, announced today that it has reached an agreement with Carl Icahn to settle their pending proxy contest related to the Company

6 Responses to “Yahoo Settles With Carl Icahn; Icahn To Control 3 Of 11 Seats; Jonathan Miller Likely On”

  1. This is a sensible conclusion which keeps Carl happy and saves face, somehow Gerry has managed to keep his head, (amazing under the circumstances to kudos to him), the board will be more open to deal opportunities, and having Jon Miller on board gives the internet experience needed to be able to look at deal opportunities. Remember Miller was the one who sold 5% of AOL to Google for $1BN,(and in the process valuing AOL at $20BN), bought Ad.com (one of the all time best acquisitions for the web), understands how to engineer high value low cost programming to sell to a premium CPM based advertiser…this is good all round.

  2. Another ex-AOL

    How many boards can Jon Miller sit on? He has his own portfolio of companies at Velocity, then boards of other startups, and now this.

  3. Joseph Weisenthal

    I don't think this ends any of the deal possibilities (MSFT, AOL, FIM). Icahn isn't going to sit around happily with a minority of the board while the status quo goes on.

    There had been some talk of a shotgun deal before the annual meeting, but now there's no rush. That's probably a good thing.

  4. ex-AOL

    What a bizarre end, does this bode well for Yahoo, or does that mean Icahn now cribs and complains at the Board meeting but nothing really happens with the Microhoo deal?
    and what about the AOL story.