Board Battle Still Looms for Yahoo Despite Mayer’s Recent Actions

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Yahoo still faces the threat of a board battle this year as shareholders remain unconvinced of Yahoo CEO Marissa Mayer’s intentions to actually sell the business.

Yahoo said Friday that it has formed a committee to seek out and engage with potential buyers and partners – a step intended to project to shareholders that it is serious about a sale of its core Web assets such as Yahoo Mail and Yahoo Sports.

Yahoo shares jumped 2.1% to close at $30.04 on Friday, but some shareholders say they remain skeptical.

“I think they are still guilty until proven innocent in my eyes,” said Eric Jackson, managing director of investment firm SpringOwl, which is a Yahoo shareholder.

Meanwhile, activist hedge fund Starboard Value is still prepared to nominate an opposing slate of candidates to the board at the end of March, according to two people with direct knowledge of the hedge fund’s activities, but who were not authorized to talk about them on the record.

Starboard’s CEO Jeff Smith, who has been pushing for a sale of Yahoo’s core Internet assets since last year, is unlikely to back down from a fight unless Yahoo voluntarily agrees to add some of his candidates to the board, these people said.

Some of Yahoo’s large investors, including Starboard, have urged Yahoo to abandon its turnaround plans and seek instead to sell all or part of its core Internet business, which has struggled to compete with Facebook and Google for ad dollars.

Earlier this month, Mayer announced a departure from her previous ambitions to grow the company through spending and outlined a $400 million cost-cutting plan to simplify the company and reduce Yahoo’s staff by about 15%.

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SOURCE: Mike Snider and Kaja Whitehouse
USA TODAY