Yahoo! billionaire backs Microsoft bid

Billionaire US investor and Yahoo! shareholder Carl Icahn (pictured) is attempting to oust the board at Yahoo! in a bid to get the Microsoft bid back on the table. Icahn hopes to bring in ten of his own directors.

In a letter to Yahoo! Icahn accused the board of acting “irrationally” in its dealings with Microsoft, which launched a $44.6bn (£22.9bn) offer for the search engine company in early February. Yahoo! shareholders will now get the opportunity to choose between the two boards at the annual meeting on July 3.

Icahn has been raising his stake in the company since the start of May and is now eyeing an additional $2.5bn worth of Yahoo! shares.

Icahn’s move follows criticism of Jerry Yang, chief executive and co-founder of Yahoo!, after he snubbed an improved $47.5bn (£24.4bn) offer from Microsoft. Microsoft pulled its offer after three months of negotiations and increasing animosity between the two companies. Steve Ballmer, Microsoft chief executive, says the $33 per share offer was dropped because Yahoo!’s demand for $37 per share “made no sense.”

Icahn said it was “unconscionable” that Yahoo! had not put the decision to shareholders, adding that the offer was a 72% premium to the value of Yahoo! shares before the bid was tabled.