Sunnyvale, Calif. - Billionaire financier Carl Icahn on Friday laid out his plans should he gain control of Yahoo (NASD: YHOO), including disposing of an employee severance plan that he called "perverse," replacing CEO Jerry Yang and offering publicly to sell Yahoo to Microsoft (NASD: MSFT) in a "friendly and cooperative transaction."

Icahn, who has been accumulating Yahoo stock in recent weeks in an effort to launch a proxy fight for control of the company's board, urged Yahoo chairman Roy Bostock to "stop dancing around the subject" and publicly offer to sell the company to Microsoft for $34.375 a share, or $49.5 billion.

In response, Yahoo called the idea of a public offer "ill-advised."

"As we have stated numerous times publicly and privately, we are open to any transaction including a sale to Microsoft if it is in the best interests of shareholders," Yahoo said.

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