March 22, 2012
Yahoo Investor Seeking Four Seats on Company’s Board
The head of a major Yahoo investor was critical of the Internet pioneer's recent appointees to their board of directors and is seeking to have four current board members replaced with representatives of his hedge fund, according to a letter that was released as part of a regulatory filing Wednesday.
The Associated Press (AP) reported that Daniel Loeb, manager of the hedge fund Third Point, argued in a letter released as part of the filing with the Securities and Exchange Commission (SEC) that Yahoo would be more successful if its four nominees were added to the company´s board.
Those four individuals are Loeb, former NBC Universal CEO Jeff Zucker, ex-MTV Networks executive Michael Wolf, and longtime private equity specialist Harry Wilson, the wire service also said. The letter came approximately one week after Third Point promised to launch a campaign to get the four individuals nominated to the board if Yahoo brass declined to appoint them on their own.
In February, Yahoo appointed former Rovi Corp digital entertainment CEO Alfred Amoroso and LiveOps customer service center Chairman Maynard Webb to the board following an announcement from Yahoo Chairman Roy Bostock and three other members that they would not seek re-election, Reuters' Yinka Adegok and Forbes' Brian Solomon said.
Loeb, whose hedge fund owns 5.8% of the one-time online search giant, said in the filing that the nominations of Amoroso and Webb were not in the company's best interest, according to Reuters. Furthermore, in their filing with the SEC, Third Point wrote, "Installing the hand-picked choices of the current board does nothing to allay concerns that the Company is poised to repeat the errors of its past."
Solomon also reports that the filing also discloses a conflict between Loeb and both Bostock and Yahoo co-founder and former board member Jerry Yang. In the letter, Third Point reportedly said that in a telephone conversation between the Loeb and Bostock, the former "questioned Mr. Bostock´s leadership and commitment to act in the best interests of shareholders" and "concluded from Mr. Bostock´s failure to acknowledge any responsibility for the Company´s problems that Mr. Bostock was unaware of what it takes to be an effective leader."
It also notes that Bostock hung up and Loeb, thus "abruptly" ending the conversation.
"Third Point further details their concern about reports at the end of 2011 that Yang and fellow co-founder David Filo might align their shares with a large purchase by private equity firms to take back more control of the company," the Forbes reporter said. "Third Point says that they sent a letter to the board requesting the resignation of Yang“¦ On January 17, Yang did just that."
"Loeb also attacked the fundamental strategy of the company as it attempts to plot a turnaround. The Third Point letter argued that prioritizing technology aspects of the business, as press reports have suggested the current plan entails, would be the wrong path," Solomon added.
Outside shareholders have until March 25 to nominate a rival slate to the Sunnyvale, California-based company's board of directors, Reuters said.