Business

MADE JERRY’S DAY

After more than a month of trading blows, it’s kiss-and-make-up time for rebel investor Carl Icahn and Yahoo! chief Jerry Yang.

Icahn – having failed to secure a new takeover offer from Microsoft CEO Steve Ballmer – approached Yang over the weekend to work out a face-saving settlement that would give him three seats on Yahoo!’s newly expanded 11-member board.

In addition to Icahn, former AOL chief and venture capitalist Jonathan Miller is coming on board along with another member of Icahn’s slate of candidates. Current director Bobby Kotick, head of Activision, is stepping down.

Icahn had been in talks with Miller about succeeding Yang should he win the proxy fight, but the two failed to reach a deal, said sources familiar with the situation.

In a twist, Yang actually suggested during settlement talks that Miller be added to Icahn’s list – and some analysts have suggested that Miller could eventually serve as CEO down the road.

The settlement – a clear win for Yang – leaves Icahn in the red on his Yahoo! stash. The billionaire antagonist owns roughly 70 million shares at between $23 and $24 a pop, according to sources. Yahoo! fell 3.5 percent, or 78 cents, yesterday to $21.67.

The stock may have further to fall as many analysts and shareholders believe Ballmer is unlikely to make a fresh run at Yahoo! in the next few months, given that the board will be controlled by a majority of pro-Yang directors.

“Ballmer basically played Icahn like a fiddle here,” said one Yahoo! shareholder. “He told Icahn that he was still interested in Yahoo! but refused to put a price out there that would have convinced shareholders to take a chance with his slate.”

Major investor Bill Miller of Legg Mason weighed in last week, saying he backed current management and urged Ballmer to publicly propose an acquisition or back off. That put enough eggs in Yangs’ basket to open the door for the settlement talks.

“Icahn obviously saw the writing on the wall and decided his best option was to get at least a few seats,” said a second large Yahoo! shareholder.

Most shareholders believe Microsoft won’t move again – if at all – until October when antitrust regulators are expected to conclude their review of Yahoo!’s search deal with Google.

Yahoo! may not have long to enjoy its good fortune. Its second-quarter earnings are due today, and sources said the company will be hard-pressed to meet analysts’ predictions of 10 percent sales growth.

Icahn is expected to push for an Asian asset spin-off and return cash to shareholders, but sources said an announcement on that front isn’t likely this week.

zachery.kouwe@nypost.com