Thanks to court disclosures stemming from a suit against Yahoo brought by two
Obviously that puts still more pressure on the Yahoo board for Yang-toadying.
The suit seeks to get the company to drop its takeover defenses and charges that Yahoo CEO Jerry Yang structured what is basically a “scorched earth” severance plan that would have cost Microsoft $2.1 billion-$2.4 billion – depending on whether it paid $31 or $35 – and, in the end, Microsoft would have been left without much Yahoo staff if it bought the joint since Yahoo folk were incentivized to quit and claim severance benefits.
Yang’s severance experts advised against such a move.
Yang, meanwhile, has been discovered to have had a press release drafted rejecting a Microsoft offer three months before Microsoft’s unsolicited offer came.
It also turns out that the day before Microsoft made its $31 a share offer public on February 1 Yahoo management rejected the idea of outsourcing search advertising to Google for fear Google would become a monopoly. Its reservations didn’t last long given the subsequent Yahoo-Google test and posturing.
Yahoo, as one might imagine, is ticked the judge unsealed parts of the investor suit. It claims the revelations could be used in a proxy fight over control of the company, which is exactly what is happening.
Carl Icahn is using the revelations to call for Yang’s head on a platter.
“It’s no longer a mystery to me,” he told the Wall Street Journal Tuesday, “why Microsoft’s offer isn’t around. 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.”
He said he was “amazed at the lengths that Jerry Yang and the board went to entrench themselves in this situation.”