Yahoo Lobbies for its Board Slate, Management

Yahoo sought to rally shareholder support for its board of directors and management amid a proxy battle with billionaire Carl Icahn, saying the investor had outlined an "ill-defined plan" for the future of the Internet company.

Yahoo!'s headquarters in California.
Paul Sakuma
Yahoo!'s headquarters in California.

Yahoo detailed its rationale for rejecting a $47.5 billion takeover offer from Microsoft and argued that the software maker's negotiating tactics cast doubt on whether it was ever serious about a full acquisition, according to an investor presentation filed with the U.S. Securities and Exchange Commission.

Icahn is running a slate of directors to replace Yahoo's board and has called for the removal of Yahoo co-founder and Chief Executive Jerry Yang ahead of the company's annual shareholder meeting on Aug. 1.

He has said the company should still offer to sell itself, though Microsoft has said it is no longer interested in a full buyout.

"Icahn misrepresents the manner in which we negotiated with Microsoft," Yahoo said in its investor presentation. "Our board remains the best and most qualified group to maximize value for Yahoo stockholders." The company struck a similar tone in a letter to shareholders last week.

Several major Yahoo investors said on Friday they are not sure whether they will side with Icahn in his proxy fight, including Legg Mason Capital Management, its third-largest institutional shareholder.

Earlier this month, Yahoo rejected an alternate Microsoft proposal to buy its search business and a 16 percent stake in the company for $9 billion, plus annual advertising payments.

Instead it reached a nonexclusive pact with larger rival Googleon search advertising. Yahoo says that deal will add as much as $450 million in operating cash flow within the first year and allow it to build other money-generating partnerships as well.

Yahoo shares fell 1.7 percent to $20.97 on the Nasdaq.