Carl Icahn Urges Yahoo to Sell

Yahoo Inc was told by Carl Icahn on Friday that it should sell the company to Microsoft Corp for $34.375 per share, or about $48.7 billion, or he will seek a deal with Google Inc if he wins control of the board.

Icahn, who is running a dissident slate to replace Yahoo’s board at its annual meeting on August 1, hadn’t previously named a price at which he believes Yahoo should agree to sell. Microsoft walked away from a $33 per share offer on May 3 after Yahoo demanded $37 a share.

“In my opinion, Microsoft does not believe you will ever sell the entire company on a friendly basis,” said Icahn in his letter. “So why don’t you stop dancing around the subject and publicly offer to sell the company to Microsoft for $34.375 per share and promise to cooperate completely?”

Icahn also renewed his attack on its co-founder Jerry Yang, who he accused of “sabotaging” the possibility of a deal with Microsoft.

“When the public owns shares, management can no longer treat the company as their plaything and fiefdom,” Icahn said. “They now are trustees and employees, which transforms into fiduciaries.”

Icahn reiterated his previous demand that Yahoo cancel a “change of control” severance plan that awards accelerated benefits to the bulk of Yahoo’s staff. Icahn cited a recent shareholder lawsuit against Yahoo, where the company estimated the value of the plan at “a staggering $2.4 billion.”

“They keep telling us that they have done this severance plan in order to aid the employees,” said Icahn. “But just the opposite is true, because they neglected to tell us that Microsoft set aside $1.5 billion which would benefit the employees,” said Icahn.

The private financier said Microsoft’s plan benefits employees if they remain at the company, while Yahoo’s plan gives them an incentive to leave.