Here’s the official end of the Yahoo-Icahn proxy war: Yahoo will give the corporate raider 3 seats on its board (one for himself, plus two more), and Carl agrees stop fighting.
The basics:
Yahoo will keep 8 of its 9 existing directors; Activision/Blizzard CEO Bobby Kotick will leave.
The board gets expanded to 11 seats. Carl gets one, and the board picks two more from a pool that includes his proposed slate, plus former AOL CEO Jon Miller. Which means: Carl, Miller and someone else join the Yahoo board, but won’t be able to do anything beyond complaining at meetings.
Yahoo and Carl explain how all the insults they lobbed back and forth at each other for the past few months, and in particular the past few weeks, were all nothing, really, and everything’s going to be great now.
If you’re so inclined, you could view this as Jerry and co caving: If they were ultra-confident that they were going to win the proxy vote next month, they wouldn’t have given Carl a thing. On the other hand, they can now go back to the business of trying to fix/save Yahoo, and get an experienced Internet mind (Miller’s) to offer some advice. That seems like a pretty good trade to us.
Release:
SUNNYVALE, Calif.–(BUSINESS WIRE)–Yahoo! Inc. (Nasdaq:YHOO - News), a leading global Internet company, announced today that it has reached an agreement with Carl Icahn to settle their pending proxy contest related to the Company’s 2008 annual meeting of stockholders.
Under the terms of the settlement agreement, eight members of Yahoo!’s current Board of Directors will stand for re-election at the 2008 annual meeting: Roy Bostock, Ronald Burkle, Eric Hippeau, Vyomesh Joshi, Arthur Kern, Mary Agnes Wilderotter, Gary Wilson and Jerry Yang. In view of the settlement agreement with Mr. Icahn, and the termination of the proxy contest, Robert Kotick has decided not to stand for re-election to the Board at the 2008 annual meeting.
Following the 2008 annual meeting, the Yahoo! Board will be expanded to 11 members. Carl Icahn will be appointed to the Board and the remaining two seats will be filled by the Board upon the recommendation of the Board’s Nominating and Governance Committee from a list of nine candidates recommended by Mr. Icahn, which includes the eight remaining members of the Icahn slate of nominees and Jonathan Miller, currently a partner in Velocity Interactive Group and former Chairman and CEO of AOL.
As part of the settlement agreement, Mr. Icahn, who owns an aggregate of 68,786,320 shares, or 4.98% of Yahoo! common stock, has agreed to withdraw his nominees for consideration at the annual meeting and to vote his Yahoo! shares in support of the Board’s nominees.
“We are gratified to have reached this agreement, which serves the best interests of all Yahoo! stockholders,” said Yahoo! Chairman Roy Bostock. “We look forward to working productively with Carl and the new members of the Board on continuing to improve the Company’s performance and enhancing stockholder value. Yahoo! is a world-class company with an extremely bright future, and collaborating together, I believe we can help the Company achieve its ambitious goals.”
“This agreement will not only allow Yahoo! to put the distraction of the proxy contest behind us, it will allow the Company to continue pursuing its strategy of being the starting point for Internet users and a must buy for advertisers,” said Yahoo! Co-founder and Chief Executive Officer Jerry Yang. “No other company in the Internet space has our unique combination of global brand, talented employees, innovative technologies and exceptional assets, attributes that will help us take advantage of the large and growing opportunity ahead of us. I look forward to working together with our new colleagues on the Board to make that happen.”
Mr. Icahn said, “I am very pleased that this settlement will allow me to work in partnership with Yahoo!’s Board and management team to help the Company achieve its full potential. While I continue to believe that the sale of the whole Company or the sale of its Search business in the right transaction must be given full consideration, I share the view that Yahoo!’s valuable collection of assets positions it well to continue expanding its online leadership and enhancing returns to stockholders. I believe this is a good outcome and that we will have a strong working relationship going forward. Additionally, I am happy that the board has agreed in the settlement agreement that any meaningful transaction, including the strategy in dealing with that transaction, will be fully discussed with the entire board before any final decision is made.”
In response to Mr. Kotick’s decision to step down from the Board, Mr. Bostock said, “I would like to personally thank Bobby for his dedicated service to Yahoo! these past 5 years. Bobby has been a valuable resource to our Board and the Company and we are grateful for his contributions. He wanted to help see the Company through this recent chapter, but made it clear to me that once the proxy contest was resolved, he was eager to focus his efforts on his work as CEO of the newly merged Activision Blizzard and his other business and civic pursuits.”
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