Starboard ramps up pressure on Yahoo
Wants ‘significant changes,’ including a new chief executive
Hedge fund investor Starboard Value threatened Wednesday to wage a board battle against Yahoo unless “significant change” is made, including a new CEO.
“It appears that investors have lost all confidence in management and the board,” Starboard CEO Jeffrey Smith told Yahoo in a letter released publicly Wednesday morning.
“To be successful, dramatically different thinking is required, together with significant changes across all aspects of the business starting at the board level, and including executive leadership,” Starboard said in the letter.
Starboard’s letter is just the latest warning shot to Yahoo’s board and CEO Marissa Mayer, whose efforts to boost the company’s financial performance through new technology and acquisitions have sputtered.
Shareholder opposition has been growing ever since Yahoo’s decision last month to abandon its plans to spin off its stake in Chinese Internet firm Alibaba, which came at Starboard’s urging. Instead, Yahoo has said it will weigh a potential spinoff of its core Internet business — a transaction that could take another year.
Starboard had been pushing for a quicker solution in the form of a taxable sale of the core assets, which include Yahoo Mail and Yahoo Sports.
Adding pressure, Yahoo shareholder SpringOwl said it, too, could wage a proxy contest at Yahoo or support one by Starboard or another shareholder.
“We haven’t decided that yet, but we have all options on the ta- ble,” SpringOwl co-CEO Jason Ader told USA TODAY in an interview Wednesday. “We like what we read today with Starboard, and we are willing to support other shareholders.”
SpringOwl called for Mayer’s ouster and a strategic overhaul last month.
In an emailed statement, Yahoo said it will “share additional plans for a more focused Yahoo on or before” its fourth-quarter earnings call, slated for this month.
“Our board and management team engage in and maintain regular, open dialogue with all our shareholders and consistently strive to deliver and to maximize shareholder value,” Yahoo said in the statement.
Starboard on Wednesday accused Yahoo of thwarting a sale process by ignoring prospective buyers who have expressed interest in acquiring its straggling Web assets.
Starboard said it was “highly confident that there are interested and credible buyers” for Yahoo’s Web business.
“It appears that investors have lost all confidence in management and the board.” Starboard CEO Jeffrey Smith, in a letter to Yahoo