Icahn's bid may force Yahoo back into Microsoft's arms

Carl Icahn's audacious bid to overthrow Yahoo's board could bring Microsoft back to the bargaining table and revive the tech megamerger. On Thursday, the billionaire investor instigated a plan to expel Yahoo's board of directors for "irresponsible" and "unconscionable" acts that prompted Microsoft to drop a $47.5 billion bid to buy Yahoo. In a letter to Yahoo Chairman Roy Bostock, Icahn says outraged Yahoo shareholders urged him to lead a campaign to replace Yahoo's 10 directors at the company's July 3 shareholders meeting. He has plenty of supporters. Paulson & Co., the $30 billion hedge fund that has built up a stake of about 50 million shares in Yahoo in recent months, says it intends to support Icahn's slate but hopes Yahoo hammers out a deal with Microsoft first. Longtime Yahoo shareholder Ryan Jacob, manager of Jacob Internet fund, also backs the Icahn bid. The best-case scenario, he says, is if Icahn succeeds in ousting Yahoo's current board with a new board more "amenable" to doing a deal with Microsoft. Icahn's move, in essence, pressures Yahoo to either strike an advertising partnership with Google or merge with Microsoft, tech analysts say.
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