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The big merger news this week was supposed to come Friday with the expiration date of Electronic Arts hostile takeover for Take Two.  Unfortunately, a number of people didn’t get the memo.  Instead, Thursday became the big day for M&A activity with not one but two major announcements lighting up the news wires. 

On one front, CBS stepped up to rescue CNET from the grips of activist shareholders by means of a $1.8billion cash tender offer.  Elsewhere, financier Carl Icahn went public with his plans for Yahoo.  He’ll begin the process Microsoft was unwilling to initiate: a tender offer to take control of Yahoo’s board of directors.

Three major deals in a week – two of them hostile and one something of a white knight rescue… it almost seems like we’ve slid back to the 80’s. Click to Read More

Carl Icahn today made his interest in Yahoo official.  More details on the proxy fight can be found in the related summary article here on Metue. Here, reprinted in entirety are the letters exchanged between Carl Icahn, initiating the attack, and Yahoo’s Roy Bostock, acknowledging it. (Biographies of his proposed board slate are available here).

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With the proxy fight officially initiated, Carl Icahn attached his nominees for Yahoo’s board to his letter to Roy Bostock. The full list of candidates, which mix former executives like Mark Cuban  (Broadcast.com and HD Net) , John Chapple (Nextel)  and Frank Biondi (Viacom) along with a number of professional investors is reprinted below along with biographies for each candidate.

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Looks like the story to watch is quickly becoming the story of the day.  Early rumors of Carl Icahn buying shares of Yahoo stock and gearing up for a proxy fight are now being supported by widespread reports that cite “sources familiar” or “involved in the matter.”  From Reuters to the WSJ, and all across the blogosphere of financial news, the news rooms and pundits are buzzing.

The reports for now provide the following set of facts (or suspected facts):

•Icahn is preparing to nominate a slate of 10, possibly 12, directors by Thursday’s deadline.
•One of the nominees is expected to be former Viacom CEO (1987 to 1996), and past Icahn compatriot, Frank Biondi.
•Icahn is proceeding with his strategy without any assurances from Microsoft that they’ll revisit merger discussions in a friendly deal if an Icahn controlled board initiates it.
•DF King has been retained to work on proxy solicitation, or prepare accordingly, should a proxy fight begin.
•Icahn is holding more than $1b of Yahoo stock.  Rough estimates are that he has at least 50million shares.

THE ICAHN ROADMAP: WHERE ARE WE HEADED?
Views can be deceptive. At first glance, the shareholdings and press leaks (which may be as engineered as the share purchases) have all the makings of a straightforward corporate raid.  Icahn buys shares, rallies support among institutional investors privately, builds buzz in the press to add additional support, then uses the consortium to replace the board and sell out. Click to Read More

Acquisitions and corporate reorganizations can be expensive and time consuming.   Electronic Arts, which has worked through both in the past year, demonstrated just how much Tuesday with the release of Q4 and yearend earnings.

Partly due to onetime charges, the game publisher recorded a quarterly loss of $94m.  The good news, on an adjusted basis, they earned $30m (9 cents a share), up from $19m last year.  The results were also more than good enough to surpass analyst consensus expectations.

By the Numbers:
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With a stock price down to the mid 20s and Microsoft saying they’ve “been there, done that” and aren’t coming back, there are more than a few Yahoo shareholders second guessing whether Yahoo management overplayed their hand.  They’re wondering if holding out was a mistake.  For billionaire investor Carl Icahn, their mistake may be his opportunity.

Reports are circulating that Icahn has bought as much as 50million shares of Yahoo stock in the past week, an amount equal to about 3.5% of the company.  There are rumors he’s buying more too.  CNBC, in fact, reported Tuesday that Icahn may be gearing up for a proxy fight aimed at seating a new board and resuscitating Microsoft’s now scuttled takeover bid.

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Yesterday’s rumor is today’s fact.  It’s now official: HBO programming will air on Apple’s iTunes under a variable pricing model. Taking advantage of routine “iTunes Tuesday” updates, the Time Warner network and Apple confirmed the suspicions.

Effective immediately, iTunes will host HBO programming.  Breaking tradition, the shows will cost either $1.99 or $2.99 per episode.   Current programming from other outlets is currently priced at just $1.99.   Most of the shows offered (Soprano’s, Deadwood) do robust DVD sales and part of the justification for flexible pricing seems to be to reduce the potential for channel conflict between the two different distribution methods.  At $2.99, the increased price won’t erase the “digital discount” but it will make price differentials between DVD buys and Digital Downloads less dramatic.

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