Activist investor Daniel Loeb is selling part of his stake
in Yahoo (YHOO) and departing the company's board of directors, a little more
than a year after he succeeded in ousting the company's previous CEO and setting
it on a path to major stock gains.
Loeb and two other directors who represented his Third Point Investors hedge fund will step down from the board at the end of this month, Yahoo announced Monday.
While Loeb will retain a smaller investment in the company, he's taking a sizable profit of close to $600 million. The New York-based financier
acquired nearly 6 percent of Yahoo's outstanding shares back in 2011, when the stock was trading in a range between $13 and $16 a share. Yahoo said it will buy back 40 million shares from Loeb, or about two-thirds of his stake in the company, at Friday's closing price of $29.11.
Yahoo's stock has surged more than 70 percent over the last year, since it embarked on a major turnaround effort led by new CEO Marissa Mayer that followed the ouster of former chief executive Scott Thompson and the resignations of several longtime directors, including the company's co-founder, Jerry Yang.
Loeb had agitated for those changes after publicly criticizing Yang and other board
members for inept leadership and for mishandling a series of deals, including a botched acquisition offer from Microsoft in 2008 and a breakdown in early efforts to sell part of the company's Asian investments in early 2012.
After he announced plans to run his own slate for the company board, several long standing directors resigned. But the controversy continued when Loeb mounted a public challenge to Thompson, who had been hired by the old board. Thompson ultimately resigned in May 2012 after Loeb discovered and publicized a false claim to a computer science degree on Thompson's resume.
Mayer was hired two months later by a mostly new board of Yahoo directors that included Loeb, turnaround expert Harry Wilson and former MTV president Michael Wolf. Wilson and Wolf are now resigning, along with Loeb.
"Daniel Loeb had the vision to see Yahoo for its immense potential -- the potential to return to its greatness as a company and the potential to deliver significant shareholder value," Mayer said in a statement Monday, in which she thanked the three directors for being "incredibly supportive as we have built our executive staff and developed our strategy."
Yahoo will spend about $1.16 billion in cash to buy Loeb's shares, which the company said will be part of a $1.9 billion stock buyback program that it announced earlier this year.
Max Levchin, a PayPal cofounder who also was named a Yahoo director last year, will remain on the company's board. Yahoo indicated in a statement that the company may make further changes in the board's size or membership, but it did not provide any details.
Contact Brandon Bailey at 408-920-5022; follow him at Twitter.com/BrandonBailey
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