BILLIONAIRE investor Carl Icahn, who is seeking control of Yahoo, said an employee-severance policy that would make a takeover of the company more costly was "obscene" and shouldn't be legal.
The program, enacted after an acquisition bid by Microsoft, boosts severance pay for workers if they lose their jobs after a change of control. The policy, described by Yahoo as an attempt to keep employees and enhance shareholder value, is an "insult to your intelligence," Icahn said.
Icahn is fighting to revive a Microsoft takeover of Yahoo, which he called "a marriage made in heaven."
The worker policy goes into effect either if a company buys Yahoo or if Icahn replaces the board, which may hamper his efforts to oust Yahoo's directors at the next shareholder meeting on August 1, Bloomberg News said. Still, Icahn said yesterday that he would continue his fight.
"Yahoo has done terribly," said Icahn, 72. "The board has done an abysmal job."
Microsoft, which dropped its US$47.5-billion bid last month after Yahoo demanded more money, is exploring a deal to acquire part of the company, such as its search engine. Yahoo's investors would be "screwed" by such a deal, Icahn said. Only a full acquisition would let Yahoo or Microsoft compete with Google.
Competition with Google is "over" without the deal, he said.
The companies are vying for a bigger share of the online advertising market.
Yahoo dropped 18 cents to $26.40 in Nasdaq Stock Market trading. The stock has climbed 13 percent this year.