Yahoo Loses Board Members That Instigated Turnaround

Daniel Loeb Cashes Out Stake and Leaves Board Along With Michael Wolf and Harry Wilson

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The ongoing Yahoo turnaround began months before the portal named Marissa Mayer its CEO. In September 2011 Yahoo investor Daniel Loeb and his hedge fund Third Point began what turned into a proxy fight that eventually led to the firing of CEO Scott Thompson, the appointment of Mr. Loeb to Yahoo's board and hire of Ms. Mayer.

Now Mr. Loeb and two other Third Point nominees to Yahoo's board -- Maeva Group chairman and CEO Harry Wilson and former MTV Network president and COO Michael Wolf, who recruited Ms. Mayer -- are stepping down, and Yahoo has bought 40 million of Third Point's shares , the portal announced on Monday (release below).

Up 87% since Mr. Loeb took his board seat, Yahoo's stock was down more than 4% Monday morning in the wake of the news.

Sameet Sinha, senior analyst at investment bank B. Riley & Co., said Mr. Loeb's primary achievement at Yahoo was Ms. Mayer's hire, but that the activist investor didn't necessarily impact the company's value on Wall Street. "Yahoo's stock price has not gone up because [Ms. Mayer] has done anything significant, but because Alibaba's value [i.e. the value of Yahoo's stake in the Chinese e-commerce company] has gone up the in the last year," he said.

"I think it's good that Dan has decided he should just let Yahoo run its business the way the company wants to and not dictate it. He's put it on the right track," Mr. Sinha added.

Mr. Loeb's influence isn't evaporating entirely. Third Point is retaining 20 million shares, or a less-than-2% stake in Yahoo. And PayPal co-founder and Third Point nominee Max Levchin will retain his seat.

July 22, 2013

Yahoo! Announces Repurchase of 40 Million Shares Held By Third Point

SUNNYVALE, Calif.--(BUSINESS WIRE)-- Yahoo! Inc. (NASDAQ: YHOO) today announced that it has entered into an agreement to repurchase 40 million shares of Yahoo! common stock beneficially owned by Third Point LLC ("Third Point"), at a purchase price of $29.11 per share. The purchase price equals the closing price of Yahoo! common stock on July 19, 2013.

Following the repurchase, Third Point will beneficially own approximately 20 million shares, representing less than 2 percent of Yahoo!'s outstanding common stock. In accordance with the Board's settlement agreement announced on May 13, 2012, each of the directors originally nominated by Third Point -- Daniel S. Loeb, Harry J. Wilson, and Michael J. Wolf -- have submitted their resignations from Yahoo!'s board of directors, effective July 31, 2013. The Board will then comprise seven members. Max Levchin, who was appointed as a director upon mutual agreement between Third Point and the Board, will remain on the Board. The remaining directors are committed to revisiting the Board's size and composition.

"Daniel Loeb had the vision to see Yahoo for its immense potential - the potential to return to greatness as a company and the potential to deliver significant shareholder value," said Yahoo! CEO Marissa Mayer. "On behalf of the Board and our entire team, I'd like to take this opportunity to personally thank Dan, Michael, and Harry for the tremendous opportunities they created here at Yahoo!. They have been incredibly supportive as we have built our executive staff and developed our strategy, and they have helped position Yahoo! for future success. While there's still a lot of work ahead, they've given us a great foundation."

"Harry, Michael and I are pleased to have played key roles in Yahoo's resurgence since we joined the Board last spring," said Third Point CEO Daniel S. Loeb. "Since our Board's rigorous search led us to hire Marissa Mayer as CEO, Yahoo!'s stock price has nearly doubled, delivering significant value for shareholders. I'm confident that with Marissa at the helm and her team's focus on innovation and engaging users, Yahoo! has a bright future."

Yahoo! previously announced a plan to purchase an additional $1.9 billion of Yahoo! common stock; the new repurchase agreement becomes part of that plan. Upon completion of this repurchase, approximately $700 million will remain under the $5 billion buyback authorization announced last year, on which the Company plans to continue to execute. Yahoo! expects to fund the transaction primarily with cash, and the transaction is accretive to earnings per share (EPS).

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