Billionaire To Lead Mutiny Against Yahoo

Billionaire investor Carl Icahn reportedly has decided to lead a mutiny against Yahoo Inc.'s board in an attempt to pressure the directors into reviving negotiations to sell Yahoo to Microsoft Corp.

To turn up the heat on Yahoo's board, Icahn has lined up a slate of 10 directors to nominate as replacements, The Wall Street Journal reported on its Web site Wednesday, citing an unnamed person close to the matter.

Icahn hadn't returned phone messages from The Associated Press as of late Wednesday. His intentions should become clear soon, however, because Yahoo has set a Thursday deadline for submitting candidates to oppose its board at the company's July 3 annual meeting.

A representative of Sunnyvale-based Yahoo declined to comment.

Yahoo's board is on the hot seat for rejecting Microsoft's initial bid of $44.6 billion, or $31 per share, and taking measures that finally drove away the software maker.

Microsoft Chief Executive Steve Ballmer orally offered to raise the offer to $47.5 billion, or $33 per share, earlier this month. He withdrew the bid May 3 after Yahoo CEO Jerry Yang, acting on behalf of the board, held out for $37 per share -- a price that Yahoo's stock hasn't reached in more than two years.

Yahoo shares rose 58 cents to close at $27.14 Wednesday on hopes that Icahn would spearhead a stockholder revolt. They gained another 51 cents in after-hours trading.

The Yahoo board's demands for $37 per share infuriated many of the company's shareholders, who are skeptical about Yang's pledge to dramatically accelerate the Internet icon's revenue growth during the next two years after being stuck in financial funk since 2005.

Hoping to capitalize on the discontent, Icahn reportedly has spent more than $1 billion to acquire about 50 million Yahoo shares -- a stake of about 3.6 percent.

Now Icahn appears ready to spend millions of dollars waging a campaign to oust the Yahoo directors, including Yang, who started the company with David Filo 14 years ago.

The Journal reported Icahn's list of alternate directors includes at least one former CEO, Frank Biondi, who used to run Viacom Inc. Biondi has worked with Icahn in previous battles -- known as proxy contests -- to unseat corporate boards.

It's usually difficult for a dissident shareholder to prevail in proxy contests.