Icahn Says He Will Try To Oust Yahoo Chief

SAN FRANCISCO | Yahoo Inc. Chief Executive Jerry Yang spent months fending off Microsoft Corp.'s unsolicited takeover bid. Now he may only have a few weeks to persuade the software maker to revive its last offer of $47.5 billion, or risk being fired in a shareholder mutiny led by activist investor Carl Icahn.

Spurred on by outraged shareholders, Icahn notified Yahoo on Thursday that he will lead a revolt to oust Yang and the rest of the Internet company's board unless they renew negotiations with Microsoft that fell apart May 3 when the two sides couldn't agree on a price.

To pressure Yahoo, Icahn has nominated an alternate slate of directors to replace the current board in an election scheduled for July 3 at Yahoo's annual meeting.

If the uprising is successful, an Icahn-led board presumably would fire Yang as CEO and try to negotiate a sale to Microsoft.

To gain leverage in the looming battle, Icahn revealed that he has spent more than $1 billion snapping up 59 million Yahoo shares and options to give him a 4.3 percent stake in the Sunnyvale-based company.

He plans to seek approval from the Federal Trade Commission to acquire up to $2.5 billion in Yahoo stock, including his current holdings.

Icahn's challenge opens a dramatic new chapter in a saga that began Jan. 31 when Microsoft stunned Yahoo with a takeover bid that started out at $44.6 billion, or $31 per share, and then rose to $47.5 billion, or $33 per share, earlier this month.