SAN FRANCISCO - Financier Carl Icahn is calling for Yahoo! (YHOO - Get Report) to remove a provision for generous severance packages to company employees, which he deemed as a major deterrent for a Microsoft (YHOO - Get Report) takeover.
The billionaire investor shot off a letter to Yahoo! on Wednesday, in which he borrowed heavily from a shareholder lawsuit claiming that the tech giant had purposely tried to sabotage a merger deal with Microsoft by introducing the severance packages.
"The board can rescind the 'severance plan' that is the largest impediment to a Microsoft deal," Icahn wrote. "You currently can do this because Microsoft withdrew their bid 30 days ago. It is time for you to stop misleading your shareholders with respect to Microsoft."
Icahn added that by removing the severance plan, Yahoo! could free up about $2.4 billion."It is also time to admit to your shareholders that the severance plan was not done for your employees (who you conveniently neglected to inform that Microsoft had earmarked $1.5 billion in retention incentives for), but rather was done simply as an entrenchment device and to impede a Microsoft bid," he wrote. A Yahoo! spokesperson could not immediately be reached for comment. On Jan. 31, Microsoft made an unsolicited $44.6 billion offer for Yahoo!, and later bumped the amount to $47.5 billion but still could not reach an agreement. Since then, Microsoft has said it is no longer interested in a merger but is currently in talks with Yahoo! to come up with an alternative deal.