hostile takeover. After Microsoft walked away from the deal, its law firm sent letters to the 10 potential board members and some alternates releasing them from their contracts, a person familiar with the matter said. Should Microsoft fail to reemerge as a bidder, Icahn may have to find other ways to boost shareholder value, such as aligning the company with Google or selling stakes in Yahoo's Asian operations, said Ross Sandler, an RBC Capital Markets analyst in New York.
"It opens up the door for everything from completely carving this thing apart and extracting value that way, to getting Microsoft back on board, to getting a new management team there to run it," Sandler said. He advises investors to buy Yahoo shares, which he doesn't own.
Icahn built his reputation in the 1980s as a corporate raider, targeting big companies such as Phillips Petroleum Co., Texaco Inc. and Trans World Airlines Inc.
At Motorola, Icahn backed the idea of splitting off the company's mobile-phone business, a plan CEO Greg Brown adopted in March. Icahn also has supported an effort by video-store chain Blockbuster Inc. to purchase electronics retailer Circuit City Stores Inc. He said last week that he would buy the company himself if Blockbuster couldn't get financing.
Icahn also prodded BEA Systems Inc. to accept a takeover offer from Oracle Corp. Icahn took some credit for the US$8.5 billion transaction, telling Bloomberg in January that he helped convince BEA's board to agree to terms.
"He's proven to be as successful in these situations as any activist investor -- probably ever," RBC's Sandler said.
