Yahoo Responds to Icahn, Claims Financier Misunderstands Facts

Authored by Mark Hefflinger on May 16, 2008 - 9:27am.

Sunnyvale, Calif. - Responding to a letter from rogue shareholder Carl Icahn blasting the company for failing to accept Microsoft's (NASD: MSFT) $33-a-share takeover offer and threatening a proxy fight for control of its board, Yahoo (NASD: YHOO) late Thursday fired back, saying that Icahn's view "reflects a significant misunderstanding of the facts."

"We do not believe it is in the best interests of Yahoo stockholders to allow you and your hand-picked nominees to take control of Yahoo for the express purpose of trying to force a sale of Yahoo to a formerly interested buyer who has publicly stated that they have moved on," the company wrote.

Yahoo said that it was prepared last month to accept a deal from Microsoft at $37-a-share, but that the software giant instead chose to "walk away from the negotiating table."

"What Yahoo's independent board refused to do was to allow control of this company to be acquired for less than its full value," the company said.

Icahn on Thursday said that the company had acted "irrationally" by rejecting Microsoft's offer, and named 10 people he plans to put up for Yahoo's board of directors.