CNBC is saying that Carl Icahn may start a proxy fight for control of Yahoo! (YHOO).
It will never happen.
Microsoft (MSFT) has made it clear that it does not want Yahoo!. At this point the bad blood between the two companies is such that a buy-out is almost certainly out of the question. MSFT may go after AOL or MySpace, but it will not go back with a $33 offer with Yahoo! trading at $26.50. It would ruin Steve Ballmer’s reputation as a negotiator forever.
No one else stepped up to offer even $30 for Yahoo!. It is not worth that much to any media company. Its earnings growth is too modest and its search business is being eaten by Google.
Icahn has two high profile failures right now, Motorola (MOT) and Blockbuster (BBI). He can’t make money on Yahoo!. A fight would be long and expensive.
And, he does not need a third failure.
Douglas A. McIntyre
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