Bob Peck On Yahoo: We Have 'Continued Faith In Board Fulfilling Its Fiduciary Responsibility' To Maximize Shareholder Value

• Yahoo! Inc. YHOO shares have dipped 32.01 percent year to date, trading almost at their 52 week low on September 28.
• Robert S. Peck of SunTrust Robinson Humphrey has maintained a Buy rating on the company, with a price target of $40.
• Peck believes that Yahoo’s board is close to making a decision on whether to go ahead with the Aabaco spin off or to consider other options, including selling the core or the whole company.

Analyst Robert Peck believes that the most likely decision that the company’s board would take would be to “pause” the spin off.

One of the primary reasons for a pause, according to the SunTrust report is that investors are believed to be “expressing their concerns about the potential tax liability and would prefer the company to assess ALL options.”

Secondly, Peck believes that there could be several interested parties if Yahoo decided to sell its core asset. In addition, it is possible that Aabaco trades at a meaningful discount to the NAV, given the tax concerns.

According to a WSJ article, Alibaba Group Holding Ltd BABA is likely to be interested in acquiring Yahoo, following a spin-off of the core asset, although it does not seem interested in acquiring shares of Aabaco.

Peck expressed “faith” in the board’s “continued fiduciary responsibility,” saying that “the board will adapt its decisions to new information that avails itself, like the potential large tax risks arising from the lack of a tax free ruling by the IRS.”

Given that the board has fulfilled its fiduciary responsibilities thus far, Peck expects it to continue to “optimize the company's structure, minimize risks, and maximize shareholder value.”