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CNBC EXCLUSIVE: CNBC TRANSCRIPT: CNBC'S MARIA BARTIROMO INTERVIEWS BILLIONAIRE INVESTOR CARL ICAHN ON CNBC'S "CLOSING BELL" TODAY

Carl Icahn
Shiho Fukada
Carl Icahn

WHEN: Today, Wednesday, December 3rd at 4:40 PM ET

WHERE: CNBC's "Closing Bell"

Following is the unofficial transcript of a CNBC interview with Billionaire investor Carl Icahn, on CNBC'S "Closing Bell" today.

All references must be sourced to CNBC.

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MARIA BARTIROMO: YOU BOUGHT AN ADDITIONAL 7 MILLION SHARES OF YAHOO! OVER THE THANKSGIVING WEEKEND. NOW YOUR STAKE IS UP TO 5.5%. WHY DID YOU BUY THIS STOCK NOW?

CARL ICAHN: WELL, FIRST OF ALL, THE WINDOW IS OPEN. IT'S ONLY OPEN EVERY THREE MONTHS AS A BOARD MEMBER THAT YOU'RE ALLOWED TO BUY IT. WE DIDN'T QUITE BUY IT OVER THE THANKSGIVING WEEKEND. WE BOUGHT IT A FEW DAYS BEFORE THAT. AND LOOK, I JUST THINK IT'S UNDERVALUED AND I THOUGHT IT WAS UNDERVALUED WHEN IT WAS A LOT HIGHER. SO I WAS WRONG THEN BUT I WAS HOPING THAT A MICROSOFT DEAL WOULD GO THROUGH AND I THINK IT'S QUITE UNDERVALUED NOW. BUT I'M NOT RECOMMENDING IT.

BARTIROMO: IT'S REALLY AN EXTRAORDINARY SITUATION. THE FACT THAT THAT BID WAS ON THE TABLE FROM MICROSOFT AND YAHOO! SAID NO TO IT. TELL ME WHAT YOU THINK HAPPENS NEXT. HOW DOES THIS PLAY OUT?

ICAHN: WELL, YOU KNOW, I'VE BEEN SAYING PUBLICLY THAT I'M HOPING TO SEE A SEARCH DEAL EVENTUALLY DONE WITH MICROSOFT AND I THINK THAT WOULD BE A HUGE PLUS FOR YAHOO!. AND WHERE MICROSOFT HAD SUGGESTED THIS A WHILE BACK AND THERE'S NOTHING IMMINENT NOW. THERE'S NOTHING -- NO DISCUSSIONS THAT WE'RE HAVING NOW THAT I KNOW OF. BUT I DO THINK EVENTUALLY SOMETHING LIKE THAT WOULD COME ABOUT.

BARTIROMO: CARL WHO WOULD YOU LIKE TO SEE AS THE CEO OF YAHOO!?

ICAHN: YOU KNOW, I'M GOING TO HOPEFULLY BE INVOLVED WITH THAT AND INTERVIEW THE CANDIDATES THE SEARCH COMMITTEE HAS. OBVIOUSLY YOU WANT SOMEBODY WHO IS A HARD HEADED BUSINESSMAN AS WELL AS SOMEWHAT SAVVY WITH THE INTERNET WHO CAN HELP TO CUT COSTS. I THINK THE COSTS ARE STILL TOO HIGH AND WE HOPE TO HAVE SOMEBODY LIKE THAT.

I KNOW WE'RE WORKING -- THE SEARCH COMMITTEE IS WORKING VERY HARD ON IT. AND -- BUT I HOPE TO BE INVOLVED WITH THAT.

BARTIROMO: NOW, HAVE YOU SPOKEN TO JON MILLER ABOUT THE POSSIBILITY OF HIM TRYING TO MAKE A BID FOR THE COMPANY?

ICAHN: IT'S SORT OF INTERESTING. I DID NOT SPEAK -- I HADN'T SPOKEN TO JON MILLER, I'D SAY FOR THREE WEEKS OR A MONTH, BEFORE THIS LAST WEEKEND. AND SO ACTUALLY I HAD NO KNOWLEDGE OF WHAT HE'S DOING AND I'M STILL NOT QUITE SURE WHAT HE'S DOING. BUT HE DID CALL ME OVER THE WEEKEND AND I WAS -- I'M RELATIVELY -- I KNOW -- I'M NOT INVOLVED WITH WHATEVER -- WHATSOEVER WITH WHAT HE'S DOING. FRANKLY, I WOULD SAY THAT TO COME IN AND, AGAIN, I'M NOT TALKING NOW AS A DIRECTOR. I'M JUST SAYING AS A LARGE SHAREHOLDER, I DON'T THINK ANY OF THE SHAREHOLDERS WOULD BE INTERESTED IN SELLING A PARTIAL 51 OR 52% OF THE STOCK EVEN AT A PREMIUM. SO I DON'T THINK THERE'S VERY MUCH TO HAVING A PARTIAL BID FOR THE COMPANY, AT LEAST AS A LARGE SHAREHOLDER I FEEL THAT WAY AND I WOULD IMAGINE THE BOARD WOULD FEEL THAT WAY. BUT I HAVEN'T REALLY GOT INTO IT WITH ANYBODY.

BARTIROMO: BUT AS A SHAREHOLDER, THOUGH, YOU WOULDN'T VOTE AGAINST SELLING PART OF THE COMPANY TO JONATHAN MILLER?

ICAHN: I BASICALLY WOULD, YES. I THINK THE STOCK IS UNDERVALUED NOW. I WOULD BE AGAINST THAT. I THINK THE STOCK IS VERY UNDERVALUED. OBVIOUSLY IF SOMEBODY WANTED TO MAKE A BID AT A VERY HIGH PRICE, ONE HAS TO LISTEN TO IT. BUT RIGHT NOW I WOULD BE AGAINST THAT, YEAH. AND I PRETTY MUCH TOLD JONATHAN THAT.

BARTIROMO: AND YOU TOLD HIM THIS WHEN HE CALLED YOU OVER THIS WEEKEND?

ICAHN: WELL I'M NOT GOING TO GO INTO WHAT I SAID. BUT I JUST TOLD YOU PRETTY MUCH MY FEELING.

BARTIROMO: WOULD YOU LIKE TO SEE ANOTHER BIDDER COME FORWARD? HOW IS THIS STOCK GOING TO GET HIGHER? WHAT DOES THE COMPANY NEED TO DO?

ICAHN: I FEEL WE HAVE TO GET A GOOD CEO IN, A HARD-NOSED, COST-CUTTING KIND OF GUY. I THINK WE HAVE TO DO -- EVENTUALLY HAVE TO DO A SEARCH DEAL WITH A -- AND I'VE SAID THIS PUBLICLY A NUMBER OF TIMES, A SEARCH DEAL WITH MICROSOFT WHERE YOU SAVE A GREAT DEAL OF COSTS AND THERE'S GOING TO BE A HUGE AMOUNT OF MONEY SPENT IN THE SEARCH BUSINESS. WE'RE DOING QUITE WELL IN THE SEARCH BUSINESS. IT WILL BE A LOT OF MONEY. WE'LL STILL KEEP THE TAK RATE. SO WE'LL GET THE BENEFIT OF THAT, BUT SAVE A GREAT DEAL OF COSTS. I THINK THAT WOULD ADD A LOT TO THE BOTTOM LINE OF YAHOO.

BARTIROMO: CARL, WHAT IF JONATHAN MILLER WANTS TO BUY THE WHOLE COMPANY, NOT JUST A PORTION OF IT? WOULD YOU GO FOR THAT?

ICAHN: MARIA, YOU KNOW, AS A BOARD MEMBER YOU HAVE TO LISTEN TO ANYTHING AND OF COURSE IF ANYBODY -- I THINK THAT'S TRUE OF ANY BOARD IN THIS COUNTRY THEORETICALLY. I'D LIKE TO GET INTO THAT ABOUT BOARDS IN THIS COUNTRY. I THINK -- I'M NOT TALKING ABOUTY YAHOO! NOW -- I LIKE A LOT OF THE BOARD MEMBERS ON YAHOO! BUT GENERALLY THE PROBLEM WE HAVE IN THIS COUNTRY IS, OUR BOARDS, GENERALLY, WITH MANY EXCEPTIONS, AREN'T DOING -- THEY'RE NOT HOLDING THEIR MANAGEMENTS ACCOUNTABLE, THEY ALLOW THEM TO --

BARTIROMO: WHO DO YOU THINK IS THE MOST EGREGIOUS BOARD OUT THERE, IN YOUR VIEW, CARL?

ICAHN: WELL, I DON'T WANT TO GET INTO SPECIFICS, BUT I THINK THIS COUNTRY WOULDN'T HAVE THE PROBLEMS THEY HAVE TODAY IF WE KEPT THESE MANAGEMENTS ACCOUNTABLE. YOU CAN'T ALMOST BLAME THE MANAGEMENTS. I BLAME THE BOARDS MORE FOR NOT HOLDING THEM ACCOUNTABLE AND I HAVE A BLOG, YOU KNOW, ICAHN REPORTED. WE'RE PUTTING TOGETHER UNITED SHAREHOLDERS OF AMERICA. I'D LIKE ANYBODY LISTENING TO JOIN THAT, BECAUSE AS A SHAREHOLDER, IT'S OUR DUTY -- AND WE SHOULD -- WE'RE CRAZY NOT TO GET A VOICE IN WASHINGTON AND DO SOMETHING ABOUT THIS. AND WE HAVE THOUSANDS OF PEOPLE THAT JOIN. I WOULD LIKE ANYBODY LISTENING TO GO TO MY BLOG AND JUST JOIN. IT DOESN'T COST YOU ANYTHING.

BARTIROMO: YOU ARE GREAT FOR DOING THAT, CARL.

ICAHN: GET A VOICE OUT THERE. YEAH.

BARTIROMO: LET ME SWITCH GEARS. YOU FILED A LAWSUIT LAST WEDNESDAY AGAINST A REAL ESTATE COMPANY OF LEON BLACK, A LONGTIME FRIEND OF YOURS. BUT YOU'RE HAVING A DEBATE OVER THE DEBT EXCHANGE. WHAT'S THE STATUS OF THIS? WHAT IS HAPPENING?

ICAHN: LOOK, I WANT TO MAKE IT CLEAR, I'VE BEEN A FRIEND OF LEON FOR A LONG TIME AND I'M STILL FRIENDLY WITH HIM AND I RESPECT HIM. HE'S A VERY INTELLIGENT GUY. FRANKLY, I CALLED HIM AND TOLD HIM I WAS FILING THIS COMPLAINT AND I WAS STILL INVITED TO A PARTY AT HIS HOUSE ON FRIDAY. I DIDN'T GO, UNFORTUNATELY, BUT WE'RE FRIENDLY. SO I DON'T WANT TO MAKE TOO MUCH OF IT. I JUST BELIEVE THE FOLLOWING, AND IT'S MORE THAN A PHILOSOPHICAL THING, GENERALLY, I THINK THIS IS GOING TO BE A MAJOR '09 ARGUMENT AND FIGHT BECAUSE PRIVATE EQUITY OWNS STOCKS IN THESE COMPANIES AND BECAUSE OF THIS MARKET AND BECAUSE OF THE LEVERAGE THAT'S ON THESE COMPANIES, A LOT OF THESE COMPANIES ARE GOING TO GO BANKRUPT AND THE SENIOR DEBT HAVE COVENANTS AND THERE'S NO POINT IN PROLONGING THIS. IT DOESN'T DO ANY GOOD FOR THE COMPANY IT DOESN'T DO WELL FOR THE EMPLOYEES. I MEAN, SOME OF THESE COMPANIES HAVE TO STOP PAYING THE INTEREST COSTS THEY'RE PAYING AND MAKE THE COMPANIES BETTER. SO, THEREFORE, WHERE SENIOR DEBT HAS COVENANTS AND PRIVATE EQUITY AGREED TO THEM, THEY SHOULD HONOR THOSE COVENANTS. AND, AGAIN, IT'S NOT A PERSONAL THING AND IT'S NOTHING TO DO WITH LEON. AGAIN, I THINK HE'S A VERY BRIGHT GUY AND A GOOD FRIEND. BUT GENERALLY SPEAKING, GENERALLY NOW, THIS HAS TO BE DONE. AND AS A BUSINESSMAN, I DON'T THINK LEON WOULDN'T EXPECT ME TO NOT DO SOMETHING ABOUT IT BEING THAT I OWN A LOT OF THE SENIOR DEBT. SO I THINK THEY ARE MAKING A LOT TOO MUCH OF THIS THING.

BARTIROMO: WELL, IT CERTAINLY SEEMS LIKE LEVERAGE BUYOUT. THE LEVERAGE BUYOUT BUSINESS IS IN FOR SOME CHALLENGING TIMES AHEAD ON THE HEELS OF WHAT HAS ALREADY BEEN A CHALLENGING--

ICAHN: ABSOLUTELY. YOU'RE ABSOLUTELY CORRECT.

BARTIROMO: CARL, THANK YOU FOR JOINING US TODAY.



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