Internet giant Yahoo! has averted a nasty, vicious proxy battle with Carl Icahn, allowing the corporate raider three places on its board.
It emerged today that the entire board of Yahoo! will step down for re-election at a shareholders meeting on 1 August, and the board will be expanded from nine to 11 members.
The move represents a step down for Yahoo! as it seeks to maintain board control and if anything could lead to more uncertainty for the company in the weeks ahead.
Icahn’s ascension to the board does not preclude the resumption of talks with Microsoft, which earlier this year launched a US$46.6bn bid for Yahoo! and has so far been knocked back twice.
Icahn famously vowed to remove the board of Yahoo! if he succeeded in taking control.
Part of the deal will see Icahn and two selected representatives join the board. Activision Blizzard chief executive, Robert Kotick, will step down as director.
An almost guaranteed insertion to the board will be Jonathan Miller, the former chief executive of AOL.
Carl Icahn has a 5pc stake in Yahoo and as part of the deal has agreed to withdraw his nominees and will support the board’s nominees.
Icahn still believes strongly that a sale of Yahoo!’s search business must be given full consideration.
If this was a war of attrition, then it can be surmised that Microsoft is still gaining ground in its quest to buy Yahoo!’s search business and become a potent rival against Google in the ad search business.
Icahn was motivated to boost his stake in Yahoo! when both the company’s founder Jerry Yang and fellow directors refused to allow shareholders to vote on Microsoft’s first offer for the company, allowing the software giant to just walk away.
In recent weeks, an alliance of sorts has been struck up between Microsoft and Icahn and his entry to the board of Yahoo! marks a considerable advance in the direction of Microsoft’s ownership of Yahoo!’s search business.
By John Kennedy