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Bob Peck Offers Thoughts On Yahoo's Proxy Contest

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Last week, Starboard, an activist shareholder in Yahoo! Inc. (NASDAQ: YHOO), was involved in a proxy contest in which it nominated 9 directors. SunTrust Robinson Humphrey's Robert S. Peck believes that in case a settlement is not reached, Starboard has "a reasonable chance of winning the contest."

Shareholding

While about 80 percent of shares are held by institutions, around 8 percent is owned by insiders. The remaining stake of about 12 percent is held by individuals or smaller funds that are not required to file disclosures.

Core Sale Process

Yahoo has asked interested bidders to file their preliminary offers by April 11. "We continue to believe a quick Core sale would maximize shareholder value. While the Core itself could be worth $6-8B for a strategic and $4-6B for a financial buyer, we believe any reasonable monetization will be accretive as the bulk of the value is "locked" in the Asian investments," analyst Robert Peck wrote.

Recommendations By Proxy Firms

"Voting principles for both ISS and Glass Lewis are based on a bedrock of accountability, stewardship, independence, and transparency," Peck said. There is a possibility of the proxy advisory firms not recommending voting for Yahoo's current board of directors in case there is a proxy fight.

Peck has a Buy rating for Yahoo, with a price target of $40.

Latest Ratings for YHOO

DateFirmActionFromTo
Oct 2016JefferiesDowngradesBuyHold
Oct 2016NeedhamDowngradesBuyHold
Oct 2016MKM PartnersMaintainsBuy

View More Analyst Ratings for YHOO
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Posted-In: Robert S. Peck SunTrust Robinson HumphreyAnalyst Color Long Ideas Reiteration Analyst Ratings Trading Ideas

 

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