It seems as Yahoo Inc. is going against the will of its activist investors as the company just appointed two new members on its board
Yahoo Inc. saga is getting ridiculous lately. No one knows what the company is up to and what the board of directors is up to. One day, the separation of Asian assets from the core internet business is finalized then the mounting pressure from the activist shareholders force the firm to officially launch an auction process for the sale of its core business. The story is all twisting and turning and no analyst knows what the final result would be.
Until last week, the sale was imminent and Yahoo was approaching bidders. But the week is not closing with the same news. It is believed that the company now opposes what it activist investors and shareholders demand of. Yahoo has appointed two new members in its board of directors which means that is has certainly safeguarded itself from any outside control. With the two appointments, it is said that a new board battle has taken life and it will ‘invoke’ discontent and disagreement among its activist investor specifically Starboard Value LP.
Starboard previously wrote in letter to sell the company’s core business and dismiss the currently appointed CEO Marissa Mayer. The activist investor was seeking control of the board in a bid to dismiss the CEO who has failed to turn around the fate of company in her three years’ tenure, according to the investor. In the past year, Yahoo stock has declined by a massive 20 percent and for all these reasons the firm is looking to sell its core internet and advertising business instead of spinning off the entire business. It will also be changing the top hierarchy.
But Marissa Mayer was asked by the Wall Street Journal analyst if she would still be in charge of the firm a year from now. She replied, “Yes, I think that, again, like I would love to, I would love to be running Yahoo. We have a three-year strategic plan. I can see how it will work and how we can actually get to a successful turnaround of Yahoo, but I think that, you know, it`s about our users and it`s about our employees and what`s happening with all of them, and I certainly hope that our services are here a year from now and that they run even better than they do today. I can see that that should easily be the outcome.”
However there were rumors speculating that Marissa Mayer, on the back end, is preparing a packaged deal which would still see her being in charge of the company even if it splits or changes hands.
The two newly appointed board members are Catherine Friedman who was former investment banker at Morgan Stanley and Eric Brandt the CFO of Broadcom Corporation. This increased the total members of board to nine but the departure of two former directors Charles Schwab and Max Levchin who is also the co founder of PayPal reduced the total figure to seven. Out of seven, four board members were appointed by Yahoo whereas the other three members were from the activist investors.
In order to take the control, Starboard Value is already in search of two board members to increase its figure to five members on the panel. This would also contribute in taking control of the management without the need of a proxy battle as five out of nine members would be in its favor.
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