- The Washington Times - Tuesday, July 15, 2008

SAN FRANCISCO | Apparently abandoning hopes for a truce with Yahoo Inc., investor Carl Icahn sharpened his focus on replacing the Internet company’s board Monday after his attempt to negotiate a deal with Microsoft Corp. was angrily rejected.

Mr. Icahn filed the final nominating papers for a slate of candidates that will oppose Yahoo’s current nine directors in a showdown scheduled for an Aug. 1 shareholder vote.

Mr. Icahn, who owns a 5 percent stake in Yahoo, also accused the board of misleading shareholders about some aspects of the proposal, which was rebuffed late Saturday.

Yahoo reiterated its disdain for Microsoft’s “ludicrous” offer in its own shareholder letter, which underscored the Silicon Valley company’s determination to fend off Mr. Icahn’s attempted coup.

The standoff caused Yahoo shares to fall $1, or 4.2 percent, to finish at $22.57 in Monday’s trading.

If Yahoo shareholders want a deal with Microsoft, Mr. Icahn said they should elect him and his other hand-picked nominees to the board.

But putting Mr. Icahn in control of Yahoo would be risky, given his inexperience in the Internet industry and the lack of any guarantee that Microsoft would be willing to pay anything near the $47.5 billion it offered for Yahoo in its entirety in early May. That bid, worth $33 per share, was withdrawn after Yahoo sought $37 per share.

Microsoft has said it might consider making another bid for all of Yahoo if Mr. Icahn gains control of the board. Many analysts, though, think Microsoft might not be willing to pay much more than $30 per share this time around.

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