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.
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.”