A secret Yahoo (YHOO) source tells the WSJ that Yahoo thinks its shareholders will reject the Icahn proxy fight. Unless Icahn delivers a Microsoft (MSFT) transaction before the July 3 shareholder meeting, we agree.
Moreover, as we’ve said, we think voting against the Icahn slate in the absence of a deal is the right move: Steve Ballmer is not a moron, and if Icahn decapitates Yahoo’s board and senior management at the July 3 meeting, Ballmer will go into delay mode until Icahn’s new board begs him to buy the company. At which point he will–in the high $20s.
We don’t think Legg Mason (5%+ holder) will support a “fire board and we’ll sell the company” Icahn board. The WSJ also seems to imply that Capital Research & Management (16%+ holder) might not support it. Without either one of these shareholders, the proxy fight looks weak. Without both, it’s toast.
WSJ chart of top 10 shareholders (Icahn has equivalent of 59 million shares):
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