From Silicon Alley Insider: 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 this is smart: 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.