Yahoo! Buys 40 Million Shares Back From Third Point
Yahoo! announced today that they are buying back 40 million shares that are owned by hedge fund Third Point LLC at a price of $29.11 per share. This is valued at $1.164 billion. The hedge fun Third Point is run by activist investor Daniel Loeb. Now Third Point will own less than 2% of the company. The three individuals that Third Point appointed on the board at the company will be resigning on July 31st. This includes Daniel Loeb, Harry J. Wilson, and Michael J. Wolf. Max Levchin, a board member that was jointly appointed by Third Point and Yahoo!, will remain on the board. The remaining board of directors will reassess the board’s size and composition.
Daniel Loeb was extremely active as a Yahoo! board member. He had Scott Thompson removed from the CEO position due to resume falsification. Loeb oversaw Ross Levinsohn’s appointment as the interim CEO before Marissa Mayer was brought in full-time.
“Harry, Michael and I are pleased to have played key roles in Yahoo’s resurgence since we joined the Board last spring,” stated 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! is going to fund the transaction “primarily with cash.” The transaction is accretive to earnings per share. Third Point now owns around 20 million shares in Yahoo!’s common stock. This share repurchase is part of a bigger $5 billion buyback program that is taking place at the company. Yahoo! repurchased $653 million in shares during the second quarter. The company previously said that they were going to purchase an additional $1.9 billion in Yahoo! common stock, according to TechCrunch.
“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,” stated 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.”This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry