For much of the spring and early summer, Yahoo’s shareholder meeting loomed as the potential defining moment in Microsoft’s battle to take control of the company and its valuable online properties. At one time, Microsoft was planning a proxy fight and was lining up its own set of Yahoo director candidates. Then billionaire investor Carl Icahn proposed his slate and began campaigning hard against the incumbent directors. The presumption was that Icahn’s directors would be amenable to a Microsoft deal.
Tomorrow’s meeting would have been the chance for Yahoo shareholders to vote, essentially, to sell the company or continue independent of Microsoft (the path Yahoo management has taken). But it turns out that the meeting will likely have none of that drama, which is not to say it won’t have drama.
Icahn and Yahoo reached a detente 10 days ago, agreeing to expand the nine-member board to 11. Under the agreement, eight of the nine current directors will stand (unopposed) for re-election; Icahn will get the ninth seat; and the board’s Nominating and Governance Committee will chose two more directors from Icahn’s pool of candidates.
That agreement diffused the proxy-fight bomb, so there will be no big reveal tomorrow. No Gordon Gekko performances from Icahn, who wrote on his blog today that he won’t even be there. We’re not even going to learn which of the Icahn candidates will become part of the expanded board, a Yahoo spokeswoman said.
Instead, expect angry investors to grill Yahoo management on how they’re going to lift the company’s stock, now around $20, to the $31-$33 a share that Microsoft had offered (or “$40 whatever blah-blah billion,” in Microsoft CEO Steve Ballmer’s accounting.) Some large investors are planning to withhold votes for Yahoo directors in protest. CNET has a good review of how this “will basically serve as a symbolic gesture to Yahoo’s board on the level of investor dissatisfaction,” but is unlikely to have any impact on who’s in and who’s out.
Still, Yahoo is calling the vote for its eight directors standing for re-election, “the most important for stockholders in our history.”
If Yahoo investors are still looking for a full sale to Microsoft, they’re unlikely to find it if you believe the comments from Microsoft’s top brass last week. A partial transaction involving just Yahoo’s search assets remains on the table — though Yahoo has rejected two different flavors of that deal this summer. It will be interesting to see, in the days and weeks following the shareholder meeting, whether Icahn’s weight on the Yahoo board will tilt the scales on the search deal.
The Yahoo shareholder meeting in San Jose starts at 10 a.m. You can take it all in via Web cast here.