Sources claiming to have talked directly with Carl Icahn say he is seriously considering initiating a proxy campaign to oust some of the Yahoo (Nasdaq:YHOO) board members. The idea is probably to do it in hopes that he can bring Microsoft (Nasdaq:MSFT) back to the bargaining table.
The word is Icahn has bought up to 50 million shares of Yahoo in preparation for the battle. That's under 4 percent of the shares outstanding at the company.
If this is to take place, it won't take long to find out, as Thursday would be the final day someone could run a proxy slate if they want to qualify for the July 3 annual meeting.
Concerning the potential this may happen, attorney Marc Weingarten said, "The odds are pretty decent. Yahoo has a lot of unhappy shareholders. And if someone could press the company in getting something done, I would think there is a decent chance at a transaction."
If anyone could get this done, it's Icahn, who has a tremendous amount of experience in getting companies back to the table to make deals. The billionaire investor also has the financial resources to run a successful proxy campaign as well.
The problem is other than Microsoft, there aren't really any other known options available where Icahn could bring immediate short-term value to shareholders. Microsoft has said it isn't interested in going back to the table. That could easily change of course, but it can't be absolutely counted on, unless there have been some behind-the-scenes talks not currently revealed.
One positive is it is known how much Microsoft is willing to spend on the company, after being turned down from their $33 a share offer, from which they walked away when Yahoo asked for $37 a share. That gives Icahn a solid parameter to work with if he decides to go forward.
With Microsoft not letting it be known if they would respond to this type of action, there's definitely some risk involved for Icahn; but who knows what's happening behind the scenes. It's very probable Microsoft would reenter negotiations if new board members were in place to make things go forward with minimal interference.
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