Legal Commentary

As I've noted several times before, I've been surprised about the kid-gloves used when discussing  Carl Icahn's Yahoo proxy bid.  His Time-Warner proxy bid flamed out so spectacularly that I expected folks to remember when he started up at the same game.  But instead, Icahn was hailed as a savvy corporate alchemist who would turn Yahoo shares back into gold.

The tide is finally starting to turn.  The tipping point appears to have been Microsoft's 24-hour sudden-death search-engine offer -- an offer allegedly crafted by Icahn and Steve Ballmer.  Here are some reactions to the bid:

• Andrew Ross Sorkin: "The deal was so ridiculous ? it called for Yahoo to sell its search business to Microsoft and for Mr. Icahn to take over the board of what was left of the company after assets were spun off and dividends paid out ? that when the moguls here started to learn the details, it actually began to change the perception of Mr. Yang?s predicament."
• Henry Blodget: "In our opinion, this was not a serious offer. We think it was designed simply to give Microsoft and Icahn more to complain about in the weeks leading up to the shareholder meeting."

And in turn, this is leading to reassessments of Icahn:

• Sorkin: "Think about it: 'What global company in their right mind formally teams up with Mr. Icahn?' as one invitee asked. Mr. Icahn may be a brilliant investor ? he actually doesn?t get enough credit or respect for that [!] ? but let?s be honest, he doesn?t use a computer, let alone know how to run Yahoo. And what does it say about Microsoft? The notion that Yahoo?s board would sell the crown jewel, its search business, to Microsoft and then hand over the scraps of the company to Mr. Icahn is, as Roy Bostock, Yahoo?s chairman, said, 'absurd and irresponsible.'"
• Blodget: "So here's what we think happened: We think Carl Icahn's personal agenda screwed up what otherwise might have been a reasonable search offer from Microsoft. (This is one hazard of having a deal-broker who also has major skin in the game.) We think Microsoft has since recognized this and is running as far from Carl as it can."

Blodget delivers this final analysis: "It's over: Carl Icahn has lost. Yahoo will win the shareholder vote."  Hopefully, Yahoo can now turn its attention to righting its storm-tossed ship.  Perhaps Yang will resign or be kicked upstairs into something akin to the Bill Gates role.  Perhaps a merger or sale will take place.  But it's unlikely that Yahoo shareholders will reminisce fondly about Icahn's endeavor.