Yahoo to buy back shares held by Third Point
The activist hedge fund agrees to sell two-thirds of its stake in Yahoo, pocketing a profit and relinquishing 3 seats on the board as Yahoo engages in a ambitious turnaround effort.
By Chris Ciaccia, TheStreet
Yahoo! (YHOO) announced it would be buying back two-thirds of hedge fund Third Point's stake in the Internet giant, spending $1.2 billion to do so.
Third Point, which was instrumental in getting Marissa Mayer to take the CEO job at Yahoo last summer, will now own some 20 million shares in the company, or less than 2% of the outstanding stock.
In conjunction with this move, three directors which Third Point's Daniel Loeb was instrumental in appointing to Yahoo's board -- Loeb himself, Harry J. Wilson and Michael J. Wolf -- will resign from the board on July 31. Max Levchin, who was appointed as a director upon mutual agreement between Third Point and the board, will remain.
Following the buyback, Yahoo will have $700 million under a previously announced $5 billion buyback plan that was introduced last year.
Last week, Yahoo reported quarterly earnings that beat Wall Street earnings estimates.
Confidence in Yahoo's turnaround plans
"Daniel Loeb had the vision to see Yahoo! for its immense potential -- the potential to return to greatness as a company and the potential to deliver significant shareholder value," CEO Mayer said in a statement regarding the transaction. "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!. 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."
In the release, Loeb noted that Yahoo!'s share price has nearly doubled since Mayer took over the top spot in Sunnyvale, Calif., and he continues to support Mayer's efforts to return the company to relevance.
"I'm confident that with Marissa at the helm and her team's focus on innovation and engaging users, Yahoo! has a bright future," Loeb said.
Loeb is embroiled in a battle with another technology company. The activist investor is having discussions with Sony (SNE) on how to enhance shareholder value at the Japanese consumer electronics pioneer. One option involves spinning off Sony's entertainment business.
More from TheStreet:
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Start investing in technology companies with help from financial writers and experts who know the industry best. Learn what to look for in a technology company to make the right investment decisions.
Like a mechanical flash mob, the group of about a thousand tiny robots can work together -- like bees or army ants -- in vast numbers without guidance.
VIDEO ON MSN MONEY
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'