July 21, 2008
Icahn keeps some wiggle room
Fans of the very public form of corporate theatre practised by Carl Icahn will be disappointed to hear that the garrulous corporate raider has agreed to a gag order as part of his settlement with Yahoo (the condition is revealed in an agreement filed with the SEC late on Monday.) Pity.
Yahoo also used a standstill agreement to tie his hands in other ways, for instance forbidding him to “support, assist or facilitate” any future acquisition attempts by others.
Still, Icahn has managed to engineer some room for manoeuvre for the next stage in this saga (and yes, there is certain to be a next stage.) For the next year at least, he is guaranteed a seat on any board committee that Yahoo sets up to consider an acquisition or other material transaction. He can cut his 4.98 per cent stake in Yahoo to below 2.2 per cent before he has to give up his board representation. And he can still stir things up if he wants to, as this clause makes clear:
Nothing [in the agreement] shall prohibit any member of the Icahn Group or any Icahn Affiliate from engaging in private discussions with third parties regarding a potential transaction to be proposed by such third party or presenting any potential transaction to the Board on a private basis, in each case, in circumstances that would not reasonably be expected to require public disclosure…
Meanwhile, even if he can’t talk publicly, Jerry Yang and Roy Bostock aren’t likely to get an easy ride. As one person who has worked with Icahn in the past says of his hectoring style: “He’s impossible. You wouldn’t want him on your board. It’s true for his friends, too: he really wears you down.”
