BoomTown Decodes Carl Icahn's Letter to Yahoo!
BoomTown’s most favorite part of the Yahoo takeover circus?
The dueling letters, of course! How the lovely practice of missives has fallen out of favor, as soulless emails have grown in use.
Well, not in the land of hostile takeovers!
So here’s our decoding of billionaire investor Carl Icahn’s thankfully brief letter to Yahoo’s Chairman Roy Bostock, informing Yahoo (YHOO) he begins bombing in five minutes.
Carl C. Icahn
ICAHN CAPITAL LP
767 Fifth Avenue, 47th Floor
New York, NY 10153
May 15, 2008
701 First Avenue
Sunnyvale, CA 94089
Dear Mr. Bostock:
Translation: Who are you? Whatever. I regret to inform you, but I eat wimpy Chairman of the Board types like you for breakfast.
Icahn wrote: It is clear to me that the board of directors of Yahoo has acted irrationally and lost the faith of shareholders and Microsoft. It is quite obvious that Microsoft’s bid of $33 per share is a superior alternative to Yahoo’s prospects on a standalone basis. I am perplexed by the board’s actions. It is irresponsible to hide behind management’s more-than-overly optimistic financial forecasts. It is unconscionable that you have not allowed your shareholders to choose to accept an offer that represented a 72% premium over Yahoo’s closing price of $19.18 on the day before the initial Microsoft offer. I and many of your shareholders strongly believe that a combination between Yahoo and Microsoft would form a dynamic company and more importantly would be a force strong enough to compete with Google on the Internet.
Translation: Here I am stating the glaringly obvious. But don’t you like my use of self-righteous and indignant words like “unconscionable”?
Nonetheless, I must ask: What are you smoking over there on the Left Coast?
When someone dangles more than $40 billion to anyone on Wall Street, we’d throw our mother under the wheels of the bus if we needed to to get it. Frankly, we would do it for $12.43.
In any case, your break with reality is my golden opportunity.
Icahn wrote: During the past week, a number of shareholders have asked me to lead a proxy fight to attempt to remove the current board and to establish a new board which would attempt to negotiate a successful merger with Microsoft, something that in my opinion the current board has completely botched. I believe that a combination between Microsoft and Yahoo is by far the most sensible path for both companies. I have therefore taken the following actions: (1) during the last 10 days, I have purchased approximately 59 million shares and share-equivalents of Yahoo; (2) I have formed a 10-person slate which will stand for election against the current board; and (3) I have sought antitrust clearance from the Federal Trade Commission to acquire up to approximately $2.5 billion worth of Yahoo stock. The biographies of the members of our slate are attached to this letter. A more formal notification is being delivered today to Yahoo under separate cover.
Translation: Gordon Crawford of Capital Research has me on speed dial, for your information. Also, you don’t have Legg Mason’s (LM) Bill Miller to kick around anymore!
Thus, like the good-only-for-pate goose you are, I am going to force-feed the Microsoft (MSFT) merger down Yahoo’s gullet on my terms and remove you from any and all decision-making.
I have bought a ton of your shares, I am going to buy more, I am checking with the Feds.
Check, check, double-check!
And, as an added SuperPoke, my largely unimpressive dissident board slate includes Mark Cuban, whose Broadcast.com Yahoo overpaid for in the last Web 1.0 bubble, giving him the ability to be the loud-mouthed, but highly entertaining owner of sports teams and a dancing fool, I might add, to always remind you that nice guys do finish last.
Nice guy? That would be you. Finish last? You again!
Icahn wrote: While it is my understanding that you do not intend to enter into any transaction that would impede a Microsoft-Yahoo merger, I am concerned that in several recent press releases you stated that you intend to pursue certain “strategic alternatives.” I therefore hope and trust that if there is any question that these “strategic alternatives” might in any way impede a future Microsoft merger you will at the very least allow shareholders to opine on them before embarking on such a transaction.
Translation: Make a move to kiss up to Google (GOOG) any more and I promise I will slap you back to last Sunday, instead of just having a hissy fit like Microsoft CEO Steve Ballmer.
As to AOL (TWX), I have three words, if you try to merge with that dog: An Overwhelming Lawsuit.
Icahn wrote: I sincerely hope you heed the wishes of your shareholders and move expeditiously to negotiate a merger with Microsoft, thereby making a proxy fight unnecessary.
Translation: Wait, I have three more words: Make my day.
CARL C. ICAHN
Translation: First, I am adult who uses all caps when writing my name, as opposed to Yang, who signs letters like a toddler, like this: jerry.
Also, I am not sincere in any way whatsoever and never have been in my entire life.
Except that one heart-breaking time when I was but a wee billionaire activist investor: Rosebud!