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February 14, 2012 10:18 pm
A dissident shareholder in Yahoo on Tuesday launched a fight over control of the beleaguered company’s boardroom, as it emerged that Yahoo’s efforts to sell its Asian investments might have foundered.
Dan Loeb, manager of New York-based hedge fund Third Point, followed through with a threat made late last year to try to have his own nominees appointed to Yahoo’s board if it failed to do enough to boost shareholder value.
Yahoo called Mr Loeb’s move “disappointing” and said he had taken a “potentially disruptive path”
The move came as Alibaba, the Chinese ecommerce company, and Softbank, which controls Yahoo Japan, called off talks they had been holding about buying back significant minority interests held by the US company.
The Asian investments are estimated to be worth some $17bn, or the bulk of its $19bn stock market value.
It was unclear how deep the differences between the sides were or whether the disagreement represented only a temporary breakdown in talks, or even an 11th-hour negotiating ploy.
One person familiar with the talks blamed the collapse on Yahoo’s unwillingness to stick by an informal agreement struck in December, when the sides appeared to have reached an outline accord on issues like valuation. As a result, the complex tax-free deal was now “off the table”, this person said. However, a person familiar with Yahoo’s position said the company had not changed its stance.
In a filing with the Securities and Exchange Commission late on Tuesday, meanwhile, Mr Loeb of Third Point sought to block Yahoo’s own plan for a boardroom overhaul, announced last week, and instead put forward his own name and those of three allies to stand instead.
“Installing the hand-picked choices of the current board does nothing to allay investor fears that Yahoo is poised to repeat the errors of its past,” Third Point said in its filing. Yahoo had hoped to appease unhappy shareholders with its own boardroom changes.
Mr Loeb’s nominees include Jeff Zucker, a former chief executive of NBC Universal. Yahoo’s appointment earlier this year of former PayPal boss Scott Thompson as its new chief executive risked leaving it too focused on technology and without the experience in media needed to develop its all-important advertising business, according to Third Point.
Under Mr Loeb’s proposal, Yahoo would lose the four directors, including chairman Roy Bostock, who had already announced they would step down at this year’s annual meeting, along with a fifth, Patti Hart. The two new directors nominated by Yahoo would also step aside, leaving four members of the existing board and giving Mr Loeb’s nominees joint control.
Mr Loeb’s slate of directors also includes Harry Wilson, a US corporate turnaround specialist,and Michael Wolf, a media consultant and former chief operating officer at MTV Networks.
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