Yahoo forms committee to explore sale, other options
SUNNYVALE, Calif. – As investor pressure intensifies – and amid talk of a possible proxy fight – Yahoo on Friday gave additional information about its exploration of strategic initiatives.
Among the details revealed, the Sunnyvale company said it has formed an independent committee to talk to possible buyers.
Investors have been impatient with Yahoo’s plans to turn around the company and have called for replacing CEO Marissa Mayer, spinning off the company’s Alibaba stake and selling the core Internet business. In December, however, Chairman Maynard Webb insisted during an appearance on television that the company was not for sale. Investors were not pleased and called for immediate action.
By the time the company announced financial results earlier this month, Yahoo said it would pursue strategic alternatives, reduce its workforce – it cut hundreds of jobs this week – and continue to try to make improvements in its Internet business by narrowing its focus.
“As both shareholders and employees, all of us here at Yahoo want to return this iconic company to greatness,” Mayer said in a press release Friday. “We can best achieve this by working with the committee to pursue various strategic alternatives while, in parallel, aggressively executing our strategic plan to strengthen our growth businesses and improve efficiency and profitability.” She again mentioned the importance of spinning off the company’s nearly $40 billion Alibaba stake.
Eric Jackson, managing director for SpringOwl Asset Management, says Yahoo may have acted too late in showing that it’s serious about strategic alternatives, such as a sale or a big investment from another company.
“I’m not sure there’s enough time between now and the end of March to show results,” Jackson said in a phone interview Friday. Starting at the end of next month, investors can wage a proxy fight to try to push for their own candidates on Yahoo’s board.
Late last year, Jackson and SpringOwl published their own, 99-page slide presentation turnaround plan for Yahoo – which calls for Mayer’s ouster. Even now, Jackson says Mayer “appears to be dragging her feet” about selling the company. He saw Friday’s announcement as a sign that the company is only now beginning to get serious about a sale, because “there’s a good chance they could lose” a proxy fight.
SpringOwl has not disclosed the amount of its stake in Yahoo.
Yahoo has hired financial advisers Goldman Sachs, JPMorgan and PJT Partners, it said Friday.
Among the companies that have expressed interest in buying Yahoo is Verizon. Media giants News Corp. and IAC/InterActiveCorp, as well as private-equity firm TPG, are also reportedly interested.