Thursday, June 5, 2008

Can Icahn win?

Thanks! Articulated very well what I have been trying to convey. There is no way for a rational YHOO shareholder to vote for Carl Icahn - unless MSFT categorically comes out in his support and puts an offer conditional on Icahn taking control of the board. That is highly unlikely considering that Ballmer just said Icahn is acting independently without support from MSFT.

Going one step futher, I believe that Icahn won't lose $$ even if he loses the proxy fight. The reason is that MSFT will still end up buying YHOO at some point in future, if not now then after a few months. If Icahn gets couple of his directors on YHOO board, then they can facilitate the transaction. The price-tag will go up once Yang wins the proxy battle. Also at that point he can easily bid up GOOG against MSFT for its search business, because he won't have to be afraid of losing his seat. A deal at a higher price may be acceptable to all parties, because MSFT would be even more desperate, YHOO and Icahn would want to cash out at a good price and GOOG would have achieved its objective of making the transaction expensive for MSFT and then putting it through the regulatory purgatory.

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