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In a scathing open-letter addressed to Yahoo chairman Roy Bostock, Ichan accused Yahoo of setting out to "deliberately sabotage" a Microsoft deal, citing recent court documents which suggest Yahoo was ready to change the severance package for its employees, making it financially beneficial for them to leave if Microsoft took over.

"Until now, I naively believed that self-destructive doomsday machines were fictional

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devices found only in James Bond movies," Icahn writes in the letter. "I never believed that anyone would actually create and activate one in real life. I guess I never knew about Yang and the Yahoo board."

Ichan went on to describe Yahoo as "deceitful" and claimed the only option was a change of board as "Microsoft might never be able to trust a CEO and board who, while claiming to be negotiating in good faith, went behind their back and adopted a plan which not only sabotages any Microsoft acquisition but went so far as to completely disable its own ability to rescind the plan as long as Microsoft's offer remains pending."

Yahoo quickly shot back, however, accusing Ichan of "misrepresenting and manipulating the facts" with regards to the severance plan: "...the employee retention program is designed to protect the company's assets and value during a time of uncertainty."

The Yahoo board is set to consider Icahn's proposals at a reconvened annual general meeting, slated for 1 August.