Yahoo! Announces $1B Convertible Senior Notes Offering, Reports Added $5B Buyback Plan

Yahoo! Inc.

(“Yahoo”) today announced that it proposes to offer $1.0 billion aggregate principal amount of its convertible senior notes due 2018 (the “notes”), subject to market conditions and other factors, in a private placement. Yahoo also intends to grant to the initial purchasers of the notes the right to purchase up to an additional $150.0 million aggregate principal amount of notes, exercisable within a 30-day period, solely to cover over-allotments. The notes will be offered and sold by the initial purchasers only to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The notes will be convertible into cash, shares of Yahoo's common stock or a combination of cash and shares of common stock, at Yahoo's election. Interest on the notes will be payable semi-annually in arrears on June 1 and December 1 of each year, beginning on June 1, 2014. The notes will mature on December 1, 2018, unless earlier repurchased or converted in accordance with their terms. The interest rate, initial conversion rate and other terms of the notes will be determined at the time of pricing of the offering. The notes will be senior unsecured obligations of Yahoo. Yahoo intends to use a portion of the net proceeds to pay the cost of the convertible note hedge transactions described below (after such cost is partially offset by the proceeds from the sale of warrants pursuant to the warrant transactions described below). Yahoo may use up to $200.0 million of the net proceeds from this offering to repurchase shares of its common stock from purchasers of notes in the offering in privately negotiated transactions effected through one of the initial purchasers or its affiliate as Yahoo's agent. Yahoo expects the purchase price per share in such transactions to equal the closing price per share of Yahoo's common stock on the date of pricing of the offering. The remaining net proceeds from the offering will be used for general corporate purposes, including, but not limited to, acquisitions or other strategic transactions, additional repurchases of common stock and working capital. However, Yahoo has not designated any specific uses of the net proceeds and has no current agreements or commitments with respect to any material acquisition or strategic transaction. Pending any specific application, Yahoo may invest the remaining net proceeds in short- and long-term marketable securities. Repurchases of common stock from purchasers of notes in the offering, as well as any additional repurchases of common stock by Yahoo, could increase, or prevent a decline in, the market price of Yahoo's common stock or the notes. Yahoo today also announced that it has increased its share buyback authorization by $5.0 billion.