The offices of Yahoo! are portrayed in Santa Monica, California, April 18, 2011.
Credit: Reuters/Mario AnzuoniBy Jennifer Saba and Paul ThomaschNEW YORK | Thu September 8, 2011 6:17 pm EDT
NEW YORK (Reuters)-activist shareholder Daniel Loeb has picked up shares of Yahoo Inc and is demanding that the company reformulate its Board of Directors, saying that the directors have made "serious mistakes" and "destroyed" value for shareholders.
A "reconstituted Board with new directors who will bring new eyes, experience in relevant industry and investor greater alignment to the table is required immediately," Loeb wrote the Chief Executive of the hedge fund third point LLC, which has about $ 8 billion under management and now owns about 5% of the shares of Yahoo.
In a letter to Yahoo's Board asked the immediate resignation of Loeb's Chairman Roy Bostock and directors Arthur Kern, Vyomesh Joshi and Susan James.
Third point said held discussions with a number of potential replacements for the current administration.
Bostock fired Yahoo CEO Carol Bartz by phone two days ago, less than three months after he expressed support for her during a shareholder meeting.
Third point welcomed Bartz's departure, but said that the Board of Directors, in the final analysis, was responsible for the performance of the company.
"Microsoft sale negotiations failed, the subsequent search agreement with Microsoft, spoiled and disappointing through a series of erroneous CEO selections and more recently the debacle Alipay, failures for this Board destroyed value for all stakeholders of Yahoo," said the letter.
Yahoo's Board said through a spokesman, that recognizes the critical challenges of the company. "In this sense, the welcomes Yahoo board a dialogue about the concerns raised by the third deposit. The Chamber is committed to act in the best interest of shareholders. "
In addition to the Council said that Bartz cannot remain as a Director of Yahoo and is forced to resign his seat.
The fact that the shareholders are starting to move is not surprising given Yahoo's recent woes and stock performance, said Scott Kessler & Standard Poors analyst.
"It was just a matter of time before something like this happened," said Kessler.
Akamai, Kessler pointed out that only one Internet company, is represented on the Board of Yahoo. "If you look at the Board of Directors, it seems to me that you have more people with experience in airlines than you do in Internet companies."
Two decades ago, Yahoo was one of the hottest Internet companies in the world-in January 2000, at the height of the Internet bubble, its stock traded in more than $ 125. Has since been mired in problems as he tries to grabbed their share of online advertising revenue, which is being removed away by larger rivals and more agile, Google and Facebook.
In 2008, Yahoo rejected Microsoft's offer to buy the company for $ 31 per share. Shares of Yahoo closed up 6.1 percent at $ 14.44 in the Nasdaq on Thursday.
Third point said their own analysis values Yahoo in more than $ 20 per share.
The hedge fund said that in four years Yahoo executives were not able to set the company on the right course and that Bartz only aggravated problems of Yahoo, especially when it came to their Asian assets.
The third point letter "poor decision-making skills and communication from Ms. Bartz publicly divested highly respected Asian partners of the company and its shareholders, sell-side analysts, bloggers, customers and employees," he said.
Yahoo is still worth approximately $ 16 billion, with much of what attributed his participation approximately 40 percent of China's Alibaba, the parent company of sites, including Alibaba.com and Taobao. Yahoo, along with the Japanese Softbank Mobile company. own Yahoo Japan.
Yahoo's Bartz relations Alibaba founder Jack Ma had worn recently. In may, Yahoo revealed that Alibaba abruptly had delivered Alipay-one of the Crown jewels of Alibaba-to a company controlled by Ma. Yahoo claimed that it was cheated by the movement.
(Reporting by Paul Thomasch and Jennifer Saba; Editing John Wallace)
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