Activist investor Starboard Value is making good on its threat to battle Yahoo’s leadership, asking fellow shareholders to oust the current board and install its own slate of nine candidates.
In a brief statement Thursday morning, Yahoo said it would review Starboard’s proposed director nominees and “respond in due course.”
The hedge fund, which holds a 1.7 percent stake in the company, said Yahoo has spurned its overtures to work constructively management and the board. “Significant board change is desperately needed to hold management accountable and properly oversee any operational turnaround plan, separation, or sale of assets,” according to a letter addressed to Yahoo investors, cited by the New York Times.
Starboard has been calling for changes at Yahoo for a year and half, threatening a proxy fight such as this in January unless CEO Marissa Mayer and Yahoo’s directors were replaced and the company pursued a new strategy to sell or restructure.
That threat came one month before Yahoo did essentially put itself up for sale. Last month, Yahoo said it would “explore strategic alternatives” while it pursued a renewed turnaround plan in parallel, after it last year shelved a strategy to spin off one of the company’s most valuable investments — a sizable stake in Chinese e-commcerce giant Alibaba. January’s plan included cutting 6,000 jobs, shutting operations like some of its digital magazines, and divest itself of assets to generate more than $1 billion in cash.
But Starboard said investors should be worried about Yahoo’s progress to sell the company.
“Despite what appears to be strong interest from large strategic and financial buyers, as referenced in the media, nearly two months have gone by since Yahoo officially publicly announced its intention to pursue strategic alternatives for the core business, and it seems little progress has been made,” the letter said.
Under Mayer, who took the company’s helm in 2012, Yahoo has struggled to reinvent itself for as a mobile focused media company, having slipped from its one-time stature as an Internet giant. But Mayer’s strategies, which included pricey acquisitions of startups, myriad mobile apps and amped-up content and news machine with big-name talent like the New York Times’ David Pogue and Katie Couric, has failed reignite meaningful revenue growth.
Starboard’s slate of board nominees includes: Jeffrey Smith, the CEO of the hedge fund; Bridget L. Baker, a former NBCUniversal executive; and Eddy W. Hartenstein, a former chief executive of the Tribune Publishing Company, the Los Angeles Times Media Group and DirecTV; among others.
Starboard didn’t respond to TheWrap’s message seeking comment.