Activist investor 'seeks to remove Yahoo board'

SAN FRANCISCO • Activist hedge fund Starboard Value, which is leading an investor revolt against Yahoo's management team, is seeking to remove the entire board of the struggling Internet company, the Wall Street Journal reported.

The activist investor, which owns about 0.75 per cent of Yahoo, planned to announce that it will nominate nine directors to Yahoo's board, the Journal said yesterday, citing a Starboard letter.

"The board and management have continually failed to live up to their own promises and shouldn't be trusted with the decision on whether Yahoo should remain an independent company," the paper reported, citing the letter.

Starboard has been pushing for changes at Yahoo since 2014, asking it to separate its Asian assets and sell the core business.

Shareholders have till March 26 to submit nominations for the board to be elected at Yahoo's annual meeting this spring. Starboard has said it is willing to launch a proxy fight with its own nominations.

Telco Verizon and publisher Time are among the companies expected to bid for Yahoo's core business, while some private equity firms are expected to team up to make offers.

Representatives at Yahoo and Starboard Value could not be reached for comment.

Starboard, one of the most prolific US activist investors, has been a harsh critic of the struggling Internet company.

Investors are losing patience with Yahoo chief executive Marissa Mayer, who has little progress to show on her revival efforts after more than three years.

Ms Mayer has presided over sluggish sales growth and so far failed to separate Yahoo's main Web business from a multibillion-dollar stake in China's Alibaba Group. Starboard began calling for changes in 2014 and has stepped up criticism of management even as Yahoo said it would consider alternatives like selling core operations.

Starboard has a record of compelling firms to heed its wishes. In 2014, it got investors to replace Darden Restaurants' board after the unpopular sale of the Red Lobster chain to Golden Gate Capital. It also pressured office-supply rivals Staples and Office Depot into a merger.

REUTERS, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on March 25, 2016, with the headline 'Activist investor 'seeks to remove Yahoo board''. Print Edition | Subscribe