Carl Icahn has landed more proxy wins than losses, Yahoo next?

Billionaire investor has racked up more wins than losses over the past 13 years, according to statistics from FactSet SharkWatch. Should Yahoo be concerned?

Dawn Kawamoto Former Staff writer, CNET News
Dawn Kawamoto covered enterprise security and financial news relating to technology for CNET News.
Dawn Kawamoto
3 min read

Editors note: This post was updated at 3:27 p.m. PDT to cite a Reuters report that Icahn plans to launch a proxy fight against Yahoo

Billionaire investor Carl Icahn has racked up more wins than losses on the proxy fights he's waged over the past 13 years, according to statistics from FactSet SharkWatch.

And as Icahn moves forward with his plans to launch a proxy fight against Yahoo, according to a Reuters report Wednesday, it may spur the Internet search pioneer to reignite failed merger talks with Microsoft. Microsoft's unsolicited buyout bid for Yahoo broke off less than two weeks ago, raising the ire of Yahoo investors who had hoped to capture the 70 percent premium the software giant was willing to pay for Yahoo.

Icahn, who tends to be a value investor and has historically avoided high-growth tech stocks, has been making his mark in the tech industry of late.

Susan Dove/CNET Networks

Icahn, for example, has waged 18 proxy fights since 1994--from Motorola, where he succeeded in reaching a settlement with the struggling cell phone maker in getting two of his representatives nominated to the board, to Time Warner.

Of these proxy contests, he has won 1 outright, 8 concessions, and 1 split for a total of 10 wins out of the 18 challenges, according to SharkWatch.

And Icahn's threatened proxy fight with BEA Systems, one of three where he's rattled the saber loudly at a company, ended up with Icahn, BEA's single largest shareholder, successfully pushing the reluctant middleware maker into a merger agreement with its former archrival, Oracle.

Icahn's extremely active role in negotiating BEA's sale to Oracle, as outlined in a Securities and Exchange Commission filing, bears some striking similarities to the Yahoo-Microsoft deal-no-deal, as well as some notable differences.

Yahoo investors, who are hoping an Icahn involvement can result in a similar outcome as Oracle's buyout of BEA, will be quick to note several similarities:

  • Oracle and Microsoft both made an unsolicited buyout bid for their respective target companies.

  • Oracle and Microsoft both set a deadline for their target companies to respond to their offer.

  • Oracle and Microsoft both withdrew their offers.

  • Icahn's proxy fights
    Credit: Susan Dove/CNET News.com
  • Oracle, with the aid of Icahn, was able to strike an offer price that the billionaire shareholder activist said he could support, which, in turn, forced BEA's hand to accept the deal. Yahoo's largest shareholders are fuming, after Microsoft walked away, and hope Icahn can pull another rabbit out of his hat.

But several notable differences exist between the Oracle and Microsoft situation. Here are a few to chew on:

  • Icahn was already amassing his stake in BEA Systems before Oracle made its interest public. In the Yahoo deal, however, Icahn reportedly amassed his stake after Microsoft pulled its deal.

  • Icahn, who never pulled the trigger on launching a proxy fight against BEA, is under greater pressure to do it in the Yahoo deal, given the deadline to nominate a dissident slate is Thursday at the close of business.

Icahn, unless he develops a close negotiating relationship with Microsoft as he did with Oracle, faces the difficult decision of whether to put together a full slate of 10 dissident directors to run against Yahoo's 10 board seats that come up for re-election to a one-year term on July 3, or a partial slate.

Without a firm offer on the table from Microsoft, or any other buyer, Icahn will have to convince Yahoo investors that it's a wise move to kick out the current CEO and the entire board and replace them with others, who may not have as much experience in working with the company. That could be a hard sell, despite investor wrath over the failed Microsoft deal, since a dissident board would be responsible for charting the company's future for at least a year, when the next shareholders meeting is held.

Icahn, without a buyer loitering about, may be better off trying to get a slight majority of Yahoo's board seats, but not the full board. It may make it an easier sell to investors, who may feel some comfort that a few folks with intimate knowledge of the company are still on board, yet should a buyer come around again, the progress of merger talks may move more quickly.