Icahn steps up attack on Yahoo board

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The public spat between billionaire corporate raider Carl Icahn and Yahoo chairman Roy Bostock has continued with yet another open letter from Icahn to Yahoo..

Icahn stepped up the attack on Bostock over his defence of the so called 'poison pill' strategy dreamed up to dissuade Microsoft from acquiring Yahoo.

"Much like the rhetoric in many well known political campaigns, you keep repeating misstatements in the hopes that by repeating them enough times it will convince your shareholders that these misstatements are valid," Icahn wrote.

The investor maintains that the plan was not fully disclosed, not was it in the best interest of shareholders.

"The documents obtained during discovery and released in the shareholder complaint show that Yahoo estimates the maximum change in control severance expenses to be a staggering US$2.4 billion if Microsoft bids US$35 per share for Yahoo," said Icahn.

"You neglected to mention that the true cost to an acquirer may be even higher as the perverse change in control severance incentives may diminish the work effort of Yahoo employees."

In the event of a change of control, the 'poison pill' would allegedly encourage an employee not to work as hard in the hopes of cashing in on a robust severance package that awards up to two years salary and benefits.

The package also provides US$15,000 of outplacement expenses, and accelerated vesting of stock options and restricted stock units.

Alternatively, the employee may decide to resign for 'good reason' at any point within two years of a change in control.

"Why don't you, now that you have the opportunity, remove the 'poison pill' severance plan that I find to be ridiculous and thereby remove a major obstacle to a Microsoft acquisition?" Icahn asked Bostock.

"In my opinion, Microsoft does not believe you will ever sell the entire company on a friendly basis.

"So why don't you stop dancing around the subject and publicly offer to sell the company to Microsoft for US$34.375 per share and promise to cooperate completely?"
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