Activist investor Carl Icahn has told Yahoo to immediately rescind the 'poison pill' employee severance plan that practically sabotaged any potential deal with Microsoft.
In a scathing letter to Yahoo Chairman Roy Bostock on Wednesday, Icahn likened the Yahoo board and the CEO Jerry Yang to a 'self-destructive doomsday machines'.
Referring to information in a shareholders' lawsuit brought against Yahoo, he said the complaint showed that Yang and a majority of the board had gone to 'inordinate lengths to sabotage a Microsoft bid'. Portions of the lawsuit were unsealed by a Delaware judge on Monday, despite the objections of Yahoo attorneys.
Icahn said it was insulting to shareholders that Yahoo for the last month had said that it was quite willing to negotiate a sale of the company to Microsoft and could not understand why the software giant has walked away.
However, the board conveniently neglected to inform shareholders about the magnitude of the plan it installed which made it practically impossible for Microsoft to stay at the bargaining table, said Icahn, who supports a merger with the software major.
Yahoo management was 'even more deceitful' to employees by telling them that the severance plan was for their good, while neglecting to mention to them that Microsoft in its proposals had earmarked $1.5 billion of retention incentives.
He said, the complaint, also revealed that this was not the first time that Yahoo had denied shareholders the opportunity of selling to Microsoft at a large premium.
In January 2007, Yahoo had rejected Microsoft offer to purchase Yahoo at $40 per share.
