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

Yahoo! Inc. (NASDAQ: YHOO) (“Yahoo”) today announced that it proposes to offer$1.0 billion aggregate principal amount of its convertible senior notes due2018 (the “notes”), subject to market conditions and other factors, in aprivate placement. Yahoo also intends to grant to the initial purchasers ofthe notes the right to purchase up to an additional $150.0 million aggregateprincipal amount of notes, exercisable within a 30-day period, solely to coverover-allotments. The notes will be offered and sold by the initial purchasersonly to qualified institutional buyers pursuant to Rule 144A under theSecurities Act of 1933, as amended.The notes will be convertible into cash, shares of Yahoo's common stock or acombination of cash and shares of common stock, at Yahoo's election. Intereston the notes will be payable semi-annually in arrears on June 1 and December 1of 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 willbe determined at the time of pricing of the offering. The notes will be seniorunsecured obligations of Yahoo.Yahoo intends to use a portion of the net proceeds to pay the cost of theconvertible note hedge transactions described below (after such cost ispartially offset by the proceeds from the sale of warrants pursuant to thewarrant transactions described below). Yahoo may use up to $200.0 million ofthe net proceeds from this offering to repurchase shares of its common stockfrom purchasers of notes in the offering in privately negotiated transactionseffected through one of the initial purchasers or its affiliate as Yahoo'sagent. Yahoo expects the purchase price per share in such transactions toequal the closing price per share of Yahoo's common stock on the date ofpricing of the offering.The remaining net proceeds from the offering will be used for generalcorporate purposes, including, but not limited to, acquisitions or otherstrategic transactions, additional repurchases of common stock and workingcapital. However, Yahoo has not designated any specific uses of the netproceeds and has no current agreements or commitments with respect to anymaterial acquisition or strategic transaction. Pending any specificapplication, Yahoo may invest the remaining net proceeds in short- andlong-term marketable securities. Repurchases of common stock from purchasersof notes in the offering, as well as any additional repurchases of commonstock by Yahoo, could increase, or prevent a decline in, the market price ofYahoo's common stock or the notes.Yahoo today also announced that it has increased its share buybackauthorization by $5.0 billion.