Yahoo buys back 40M shares from Third Point

Steven Loeb · July 22, 2013 · Short URL:

Third Point CEO Dan Loeb, and other Third Point appointees, resign from board of directors

Hedge fund Third Point, and its CEO Dan Loeb, caused a major shakeup at Yahoo last year, effectively kicking out Yahoo CEO Scott Thompson over a resume-fudging scandal then using the opportunity to take over the board of directors at the company.

Now, over a year later, Loeb seems happy with the direction being taken by CEO Marissa Mayer, and is backing off, allowing Yahoo to repurchase 40 million shares of Yahoo owned by Third Point, it was announced Monday. The shares are priced at $29.11, the closing price of Yahoo stock on July 19, 2013. Third Point will still own roughly 20 million shares, or less than 2% of Yahoo's outstanding stock.

In addition, all three members of Yahoo's board of directors that were nominated by Third Point in May of last year, (Loeb, Harry J. Wilson, and Michael J. Wolf) have all submitted their resignations and will be leaving at the end of the month. Max Levchin, who was appointed as a director upon mutual agreement between Third Point and the Board, will remain.

“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!," Mayer said in a statement. "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.”

The takeover of Yahoo by Loeb and Third Point began in May of 2012, when Loeb sent a letter to the Yahoo board of directors accusing Scott Thompson of lying about his academic record.

After Yahoo did not immediately let Thompson go, Loeb sent another letter to the board, this time demanding that he be given access to the hiring documents. In response, Yahoo said they would be setting up a special commission to look into the process.

Only a week and half after sending the first letter, Thompson resigned and Loeb was able to install himself, as well as his supporters onto the board. Loeb was then intstrumental in setting ip Mayer as his replcement.

He finally seems to be satisfied in the direction the company is going, which expains why he is giving up his control.

"Harry, Michael and I are pleased to have played key roles in Yahoo's resurgence since we joined the Board last spring," Loeb said in a statement. "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's stock is taking a bit of a hit so far on Monday, dipping 4.47%, ot $1.38 to $27.73 a share.

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