Yahoo's Change at the Top Doesn't Appease Daniel Loeb
It was revealed on Monday that Yahoo! (NASDAQ: YHOO) has named three new directors to its board in an attempt to stifle criticism from investors of the existing board.
According to Forbes though, the move has not appeased investor Daniel Loeb of Third Point at all, and he is still looking to stage a proxy contest against YHOO as he seeks four seats on the board.
The new directors at Yahoo! include John D. Hayes, executive VP and chief marketing officer of American Express, Peter Liguori, former chief operating officer of Discovery Communications and former chairman and president of entertainment of Fox Broadcasting Network, and Thomas J. McInerney, outgoing CFO of IAC/InterActiveCorp.
Patti Hart, chairman of the YHOO board's nominating and corporate government committee, released a statement saying that, “Each of these individuals impressed the search committee with their demonstrable records of significant accomplishment at the highest levels of media, advertising and marketing, finance, including corporate finance and restructuring, and further insight into customers' perspectives. Together, they bring a powerful mix of exactly the right ingredients to fuel Yahoo!'s forward momentum. Having thoroughly reviewed a broad range of highly qualified candidates and sought input from a number of major shareholders, the Committee enthusiastically recommended to the full Board the appointment of these three excellent directors.”
The company also made what it considers an appropriate move in nominating Harry Wilson, a restructuring expert proposed by Loeb.
Yahoo! would obviously rather avoid the “cost and distraction” of a proxy fight, but it appears that Loeb will leave them will little choice. YHOO maintains that nominating Loeb to the board is not in the best interests of the company or the shareholders.
Loeb, naturally, disagrees, saying in a statement that, “Third Point offered several significant compromises to strike a deal and avoid a proxy contest. Today, the board has shown yet again that they are unable to execute deals that are in the company's best interests. Sadly for shareholders – who will once more bear the costs – the consequence of the board's refusal to accept Third Point's shareholder-friendly proposals will be a time-consuming and distracting proxy contest that the company can ill-afford.”
It has been a tough year for Yahoo! On March 6, Piper Jaffray released a research report staing that 55% of home page ads observed in February were guaranteed compared to 75% last February and 35% in January. “More importantly we believe the rate of rich takeover units was up meaningfully in February. While deal talks seem to have slowed, we believe a Alibaba/Yahoo! Japan deal could still happen and would drive upside through excess cash that Yahoo! could use to buy back shares.”
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