Icahn raises stake in Yahoo
29 November 2008
Billionaire investor, , raised his stake to 5.5 per cent in the struggling Internet company, Yahoo, this week with the purchase of close to seven million additional shares. The strengthening of his stake is designed to enable Icahn to increase his clout in the nomination of a successor to outgoing Yahoo CEO Jerry Yang.
Icahn purchased 6.8 million shares of Yahoo stock for approx $65 million at an average price of $9.92, thus raising his already existing stake of about 69 million shares of Yahoo which he bought for approx $25 a share in July this year, bringing his total stake in the company to 75.6 million shares.
According to analysts, Icahn has made the move on presumption that the company's share price will pick up as founder and CEO Jerry Yang has announced his decision to quit (See: Founder Jerry Yang exits CEO's position at Yahoo! ) following the failed online advertising deal with internet search giant, Google.
Icahn had joined the board of directors of Yahoo after he started snapping up shares of the company in July and disagreed and even threatened to replace the current directors after the company's management rejected the $42 billion takeover offer by Microsoft Corporation.
Icahn, later tried to oust Jerry Yang in a bid to get both companies back to the negotiating table, which was turned down by Microsoft as said it was no longer interested in the acquisition.
Yahoo then signed a non-exclusive ad search deal with internet rival Google wherein Yahoo would run ads supplied by Google alongside its own search results and on some of its websites in the US and Canada, thus adding approx $800 million in its annual revenue. (See: Yahoo strikes $800-million ad deal with Google, ends talks with Microsoft)