Dear Mr. Bostock:----
It is clear to me that the board of directors of Yahoo has acted irrationally and lost the faith of shareholders and Microsoft. It is quite obvious that Microsoft's bid of $33 per share is a superior alternative to Yahoo's prospects on a standalone basis. I am perplexed by the board's actions. It is irresponsible to hide behind management's more than overly optimistic financial forecasts. It is unconscionable that you have not allowed your shareholders to choose to accept an offer that represented a 72% premium over Yahoo's closing price of $19.18 on the day before the initial Microsoft offer. I and many of your shareholders strongly believe that a combination between Yahoo and Microsoft would form a dynamic company and more importantly would be a force strong enough to compete with Google on the Internet.
During the past week, a number of shareholders have asked me to lead a proxy fight to attempt to remove the current board and to establish a new board which would attempt to negotiate a successful merger with Microsoft, something that in my opinion the current board has completely botched. I believe that a combination between Microsoft and Yahoo is by far the most sensible path for both companies. I have therefore taken the following actions: (1) during the last 10 days, I have purchased approximately 59 million shares and share-equivalents of Yahoo; (2) I have formed a 10-person slate which will stand for election against the current board; and (3) I have sought antitrust clearance from the Federal Trade Commission to acquire up to approximately $2.5 billion worth of Yahoo stock. The biographies of the members of our slate are attached to this letter. A more formal notification is being delivered Thursday to Yahoo under separate cover.
Microsoft has stayed silent and has not publicly commented on Carl Icahn's move. Previsouly, Steve Ballmer disbanded his slate of Directors. What we know is that there are at least two members common to both slates. They are: John Chapple, Former CEO of Nextel Communications and Ed Meyer, Former CEO of Grey Global Group. By selecting at least two members from the slate that Baller assembled for possible proxy fight before, Carl Icahn is signaling his intenstion to restart the negotiations with Microsoft. These two serve as the conduit for communication between Carl Icahn and Steve Ballmer.
Could Ballmer ultimately get Yahoo at an even lower price that $34? Will key Yahoo talent take flight?