Yahoo: We Will Slay Hedge Fund Wolf Pack in Proxy Fight
A secret Yahoo (YHOO) source tells the WSJ that Yahoo thinks its shareholders will reject the Icahn proxy fight. Unless Icahn delivers a Microsoft (MSFT) transaction before the July 3 shareholder meeting, we agree.
Moreover, as we've said, we think voting against the Icahn slate in the absence of a deal is the right move: Steve Ballmer is not a moron, and if Icahn decapitates Yahoo's board and senior management at the July 3 meeting, Ballmer will go into delay mode until Icahn's new board begs him to buy the company. At which point he will--in the high $20s.
We don't think Legg Mason (5%+ holder) will support a "fire board and we'll sell the company" Icahn board. The WSJ also seems to imply that Capital Research & Management (16%+ holder) might not support it. Without either one of these shareholders, the proxy fight looks weak. Without both, it's toast.
See Also:
Another Hedge Fund Mogul Joins Icahn Siege; Jerry Nearly Surrounded
If Icahn Can't Get Microsoft Deal Before Shareholder Meeting, He'll Lost Proxy Fight
WSJ chart of top 10 shareholders (Icahn has equivalent of 59 million shares):
May 21, 2008 5:03 AM ET
HERZLIYA, Israel (Reuters) - Microsoft Corp is not looking to bid to buy all of Yahoo Inc but is in talks about other types of deals with the U.S. No. 2 search engine, Microsoft CEO Steve Ballmer said on Wednesday.
"We are not bidding to buy Yahoo," Ballmer said at the launch of Microsoft's new research and development centre in Israel.
"Yet, we are trying to have discussions about deals with Yahoo that might create value, but not a whole acquisition of the company," he said without elaborating further.
http://www.youtube.com/watch?v=qhedESQJhAA
If the leak is true, I agree with them.
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7bB4474685-CFF6-4A82-8F8D-B9405C1CD2AE%7d&siteid=yhoof2
Rebates are a core element of oligopolistic competition. This one makes sense for MSFT, since Google has a lot more to lose were it to match the MSFT offer.
If successful, this is certainly invasive and "disrupting."
I would expect MSFT to market it vigorously... while at the same time killing it unintentionally with the cardboard-sandwich flavor of "Direct Search."
Question: If Google is so "innovative" and such a fearsome "market-crusher" why did they not come up with this idea first? If the idea succeeds, guess who will have to copy who? Guess who will be hurt more by it? So much for all that market-crushing innovation they're so famous for - and supposedly second-to-none on.
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