Yahoo board picks spark ‘distracting’ proxy fight from investor
Yahoo Inc., in an attempt to “reshape and refocus” itself, appointed three new independent directors to its board, including a top executive from American Express Co. But the move isn’t passing muster with activist investor Daniel Loeb, who plans to launch a proxy battle unless he’s personally appointed to the board.
The fight will be costly and a “distraction,” executives at the Internet company said in a statement Sunday after naming as board members John D. Hayes, AmEx’s executive vice president; Peter Liguori, former chief operating officer of Discovery Communications Inc.; and Thomas J. McInerney, the outgoing chief financial officer of IAC/InterActive Corp.
The appointments, which take effect April 5, were made with a “sense of urgency” to “fuel Yahoo’s forward momentum” and “increase shareholder value,” according to Yahoo.
But Loeb, who founded and runs hedge fund Third Point and is Yahoo’s largest outside shareholder, remains unconvinced.
Yahoo said that it had considered nominees proposed by Third Point – including former executives at NBC Universal and MTV Networks -- but decided that the trio it settled on was ultimately more qualified.
To appease Loeb, Yahoo offered to allow one of his picks, restructuring specialist Harry Wilson, as well as another mutually acceptable candidate to join the board.
The company said that Loeb rejected the compromise and continues to seek a seat for himself on the board – which Yahoo said is “not in [its] best interest.”
The Sunnyvale, Calif., company has long been trying to find its footing, replacing former Chief Executive Carol Bartz with PayPal’s Scott Thompson in January and struggling to play ball with competitors such as Google Inc. while turning down a $47.5 billion overture from Microsoft Corp. Founder Jerry Yang resigned from the board earlier this year.
In a statement late Sunday, Third Point said it is “disappointed” in Yahoo’s choice. The investment firm took a few swipes, calling Yahoo’s board “dysfunctional” and accusing it of spoiling for a “time-consuming and distracting proxy contest that [it] can ill-afford.”
Other recent and notable proxy wars: Carl Icahn’s battle to seize control of Lions Gate Entertainment Corp. and Ron Burkle’s clash with Barnes & Noble Inc. over his stock holdings.
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