Sunnyvale, California-based Internet pioneer Yahoo announced Tuesday that it will hold its annual shareholder  meeting on August 1, during which billionaire investor Carl Icahn is expected to seek to have his alternate slate of 10 board members elected, replacing current Yahoo board members including co-founder and chief executive Jerry Yang with directors more agreeable to selling Yahoo to Microsoft. If Icahn's proxy fight were to succeed he would also seek the removal of Yang as chief executive at Yahoo, according to a Wall Street Journal report. Icahn Sees Yahoo Not Acting In Shareholders' Best Interests Icahn has said that Yahoo's board of directors made a flawed move when it refused a takeover bid from Microsoft valued at $47.5 billion at the time, because it was detrimental to maximizing financial gains for Yahoo shareholders. Some Yahoo shareholders, who have expressed their displeasure with the company for not accepting a Microsoft offer that was valued at more than a 60 percent premium when initially made, may be likely to react positively to a push for Icahn's slate of directors at the annual meeting. Since Microsoft withdrew its bid on May 5, Icahn has purchased some 10 million shares of Yahoo stock and options to buy 49 million more, valued at more than $1.5 billion, representing more than 4 percent of the firm, and he said recently he would ask permission from the Federal Trade Commission to increase his stake in Yahoo to some 6 percent, or $2.5 billion. Court Documents Unsealed Monday Reveal Sabotage, Icahn Claims Citing court documents related to a shareholder lawsuit that were unsealed Monday, Icahn has targeted Yang and the other Yahoo directors for the failure of talks between the pioneering Web firm and Microsoft. "It's no longer a mystery to me why Microsoft's offer isn't around," Icahn said, according to the Journal report. "How can Yahoo keep saying they're willing to negotiate and sell the company on the one hand, while at the same time they're completely sabotaging the process without telling anyone?" Icahn added. "I don’t think anybody ever understood the magnitude of what Yahoo did to do avoid making a deal," Icahn is quoted as saying in a recent New York Times report. "In my opinion, you might have to get rid of Jerry and part of the board to bring back Microsoft," Icahn is quoted as saying. In a response to Icahn's allegations that Yahoo tried to sabotage a deal with Microsoft, Yahoo repeated its stance that it remained open to proposals from the world's biggest software firm. "Yahoo's board of directors, including Jerry Yang, has been crystal clear that it would consider any proposal by Microsoft that was in the best interests of its shareholders," Yahoo said in a statement. Attempts To Thwart Microsoft Claimed Yahoo said that it held a series of good faith discussions with Microsoft over a period of months, which ultimately led to Microsoft chief executive Steven Ballmer withdrawing his firm's offer. "Mr. Icahn's assertions ignore this clear factual record," Yahoo said in the statement. In a May news release Ballmer disclosed his reasoning behind withdrawing his offer for Yahoo. "Despite our best efforts, including raising our bid by roughly $5 billion, Yahoo has not moved toward accepting our offer," Ballmer noted. "We believe the economics demanded by Yahoo do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal," added Ballmer. Icahn has stepped up pressure on Yahoo since the release of further court documents earlier this week revealed that Yahoo took measures that may have been aimed at blocking a Microsoft acquisition attempt months before the Redmond firm made its initial bid public. Yahoo has encouraged its shareholders to re-elect the slate of nine directors it has nominated, and to vote against Icahn's alternate slate. "Our board of directors unanimously recommends a vote for the election of all of the board’s nominees," Yahoo said last month in a United States Securities and Exchange Commission filing. A shareholder lawsuit claims Yahoo implemented a pricey employee retention plan in an effort to ward off Microsoft's bid, leading to its eventual withdrawal. August Proxy Fight Expected At Yahoo Annual Meeting Yahoo's annual shareholder meeting will take place in San Jose, California nearly a month later than an originally scheduled July 3 date, a postponement seen by some analysts as an effort to buy Yahoo more time  to ensure its shareholders will re-elect the existing board members. While Microsoft has not commented on Icahn's recent statements, billionaire News Corp chief executive Rupert Murdoch downplayed the importance Icahn has in bringing Microsoft back to the bargaining table with Yahoo. "For Microsoft it is helpful noise. If I were Yahoo, I wouldn't worry about it," Murdoch said last week at a technology conference in California. "Look, he wants to make himself a few hundred million dollars," added Murdoch, who also said that Icahn was "not serious" about restarting negotiations between Microsoft and Yahoo. Yahoo has said that talks with Microsoft were ongoing, according to Yahoo president Sue Decker, who spoke Monday at an advertising conference in New York. It also said that the suit brought by some of its shareholders was without merit. Related Links:
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