Yahoo Responds to Dan Loeb of Third Point, Rejects Loeb's Nominees
Dan Loeb of Third Point Capital is a significant Yahoo! (NASDAQ: YHOO) shareholder. He has been attempting to influence Yahoo by replacing multiple Yahoo board members.
Yahoo offered Loeb an opportunity to influence two board seats. Loeb nominated himself for one of the two, but earlier today, Yahoo rejected Third Point's nominations in a letter to its shareholders.
In its shareholder letter, Yahoo states: "The board continues to believe that Mr. Loeb himself does not bring the relevant skill set and experience to the board, particularly in comparison to the candidates selected by the board. In addition, we believe that, based on the specific qualifications of Third Point's nominees relative to Yahoo!'s business and opportunities, the candidates nominated by the board's Nominating and Governance Committee are significantly superior to those proposed by Third Point."
Eric Jackson of Ironfire Capital is a noted critic of various tech companies, including Yahoo.
Jackson told Benzinga he sides with Loeb's move to replace board members of Yahoo and sees other strategic actions that could set Yahoo on a better track. Jackson claims that four of the weakest board members are ripe for replacement: Susan James, John Hayes, David Kenny and Peter Liguori.
Jackson claims the replacement of these board members is a sensible move. He explains that Yahoo is crazy not to settle with Loeb, and that “Loeb is simply asking for a seat at the table. Yahoo's old board would still have more control.”
Jackson voices that Yahoo needs a strategic change, not just an organizational change. To this end, Yahoo needs to manage its investments in Yahoo Japan and Alibaba Group. Jackson explains that Yahoo should monetize its Yahoo Japan investment, and stay invested in Alibaba Group. Alibaba Group, Jackson points out, had revenue similar to that of Baidu (NASDAQ: BIDU) and could achieve a similar rich valuation. To benefit from this valuation, Yahoo should consider setting a date for Alibaba group to go public.
Jackson also believes Yahoo should move towards a more unique and user-based strategy. Possible acquisitions that could enable this new strategy are Yelp (NASDAQ: YELP) and TripAdvisor. “It has got to be a strategy that is differentiated from Facebook (NASDAQ: FB) and Google (NASDAQ: GOOG),” says Jackson.
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