Yahoo! proxy fight looms after board shakeup
Yahoo! announced the appointment of three independent board members as the struggling Internet firm moved to shake up its team and fend off a challenge from an activist hedge fund.
But the hedge fund seeking to wrest control of the firm said it was disappointed with the move, and would press its case to shareholders.
Yahoo! said the new board members were John Hayes, executive vice president and chief marketing officer of American Express; Peter Liguori, former chief operating officer of Discovery Communications and former chairman and president of entertainment of Fox Broadcasting Network; and Thomas McInerney, the outgoing chief financial officer of IAC/InterActiveCorp.
Yahoo said the new board members “bring a powerful mix of exactly the right ingredients to fuel Yahoo!’s forward momentum.”
Yahoo! named Scott Thompson as its new chief executive in January and promised urgent action to turn the company around after a year of falling income and profits.
Thompson, named Yahoo! CEO only on January 4, said the Internet giant needed to move quickly to exploit its huge bank of user data to regain market share, especially in display ads where it has lost ground.
But the nominating committee rejected a push for a slate of nominees from hedge fund Third Point, which has taken a large stake in Yahoo, saying it chose the “best qualified” candidates.
A Yahoo! statement said the company had proposed accepting one of the Third Point candidates along with another candidate mutually acceptable to the board and the hedge fund.
But the statement said Third Point founder and chief executive Daniel Loeb “rejected this proposal and declined to end Third Point’s solicitation with respect to its own four candidates unless he personally was appointed to the board.”
The Yahoo! board said it “remains open to hearing Third Point’s ideas and to working constructively with Third Point, but believes that appointing Mr. Loeb to the board is not in the best interest of the company and its shareholders.”
But Third Point said it was disappointed and that the Yahoo! board “has shown yet again that they are unable to execute deals that are in the company’s best interests.”
“Since we launched our campaign for a better Yahoo!, our goal has been clear: to fix a dysfunctional board by adding new directors who are truly independent and squarely aligned with shareholders to increase Yahoo!’s value,” a Third Point statement said.
“Since the board has left us with no choice but to take our case directly to our fellow shareholders, Third Point intends to move forward with a proxy contest. Yahoo!’s shareholders deserve a voice and a choice. We intend to provide them with one at this year’s annual meeting.”
After Thompson was recruited, Yahoo! co-founder and former chief executive Jerry Yang resigned from the board of directors. A few weeks later the chairman and three other directors said they would step down, opening the way for Thompson’s agenda.