As we all know Yahoo turned down Microsoft’s offer to buy them for the first time over 2 years ago at $40 a share.
Then in January when Yahoo was floundering at $19 a share, Microsoft came along and offered $31.
Yahoo said there stock was less no less than $37 a share and turned Microsoft down.
Microsoft reportedly raised their offer, informally to $33, Yahoo said no again, they wanted $37.
Carl Icahn took a large position in Yahoo stock and is seeking to replace the board of directors with a slate of his own which presumably would do some sort of deal with Microsoft.
Yahoo ran to Google and entered into a partnership for Google to handle their PPC advertising.
Last weekend Microsoft and Icahn offered another deal to Yahoo to buy its search business which Yahoo also turned down.
Yahoo said this week that it would sell the whole company to Microsoft for $33 a share, which it turned down 2 months ago.
So the question is has any company handled a public negotiation worse the Yahoo has?
We think not.
However the current Yahoo board did get some good news this week, when a one of its largest shareholders, Legg Mason Capital Management Inc, announced that it will be supporting the re-election of the Internet company’s incumbent board, delivering a significant blow to an attempted coup being led by activist investor Carl Icahn.
The final ballots in Yahoo’s battle with Icahn will be cast at the company’s annual meeting Aug. 1.
Legg Mason, a mutual fund manager, owns 4.4% of Yahoo’s stock.
Legg Mason said it believes the current board can just as easily handle any future negotiations with Microsoft as the Icahn-backed candidates.
“We believe the current board acted with care and diligence when evaluating Microsoft’s offers,” Legg Mason Chairman Bill Miller said in a statement. “We believe the board is independent and focused on value creation for long-term shareholders.”
Microsoft has said it doesn’t believe it can negotiate a deal with Yahoo’s current board.
With Legg Mason on its side, Yahoo has lined up support from the owners of at least 14% of its shares, including Yang and fellow Yahoo co-founder David Filo, who together control nearly 10% of the company’s stock.
Another major Yahoo shareholder, Gordon Crawford of Capital Research Capital Investors, has publicly expressed his anger with the company’s board, without stating how he might will vote in the upcoming showdown. Crawford’s decision will be crucial because his fund owns more than 6% of Yahoo’s stock.
Yahoo’s second-quarter earnings report, due out Tuesday, also could affect shareholder sentiment.
After Google’s second-quarter profit disappointed investors Thursday, analysts suspect Yahoo’s results will be a letdown too. If that happens, more shareholders may be inclined to oust a board that has overseen more than two years of financial malaise.