Icahn presses for new board at Yahoo

SAN FRANCISCO — Billionaire investor Carl C. Icahn is setting out to oust Yahoo Inc.’s board of directors for “irresponsible” and “unconscionable” actions that led Microsoft Corp. to withdraw a $47.5 billion offer to buy the slumping Internet pioneer.

In a letter sent yesterday to Yahoo Chairman Roy Bostock, Mr. Icahn wrote that outraged Yahoo shareholders had urged him to lead a campaign to replace Yahoo’s 10 directors at the company’s July 3 annual meeting in the hope of bringing Microsoft back to the bargaining table.

To give him leverage in the looming battle, Mr. Icahn revealed that he has spent at least $1.3 billion snapping up about 59 million Yahoo shares to give him a roughly 4 percent stake in the Sunnyvale, Calif.-based company. He plans to seek approval from the Federal Trade Commission to acquire up to $2.5 billion in Yahoo stock.

A Yahoo representative said the company would respond to Mr. Icahn’s attack “soon.”

Mr. Icahn told Yahoo’s board it could quickly quell the shareholder mutiny by renewing negotiations with Microsoft.

Besides himself, Mr. Icahn’s alternate board of directors includes Internet entrepreneur Mark Cuban, who got rich by selling Broadcast.com to Yahoo for $8.1 billion in stock in 1999. Mr. Cuban used part of his Yahoo windfall to buy the Dallas Mavericks, a National Basketball Association franchise that he still owns.

The revolt threatens to jettison Jerry Yang from the company that he started with David Filo 14 years ago. Mr. Yang is one of Yahoo’s directors and has tried to engineer a turnaround since taking the job of CEO 11 months ago.