Third Point Blasts Yahoo ‘Mismanagement’

Dec 14 2011 | 4:54am ET

Nothing interferes with Daniel Loeb’s holiday spirit like Yahoo! Inc. and its board of directors.

The Third Point chief renewed his war of words with the Internet search company, pronouncing himself “extremely troubled” by its management’s behavior. In particular, Loeb took aim at a reported “sweetheart PIPE deal which will serve only to entrench [founder Jerry] Yang and the current board while massively disenfranchising public shareholders and permanently robbing us of the opportunity to obtain a control premium.” Loeb said that the sale of the whole company, rather than minority stakes, was in the best interest of shareholders.

Wielding his famed poison pen, Loeb blasted the “dysfunction and inequity being exhibited in the process of maximizing stockholder value that the board is allegedly ‘managing,’” but admitted he was “not surprised by this mismanagement given the history of strategic bungling by Yahoo Board Chairman Roy Bostock and founder Jerry Yang.”

Loeb called on Yahoo to make public its “process letters” in which it invited companies to make it offers. “We assume that Yahoo’s process letters did not place any artificial restrictions on the proposals that the Yahoo board was willing to consider in its search for strategic alternatives, such as discouraging, or even prohibiting, bids to purchase Yahoo in its entirety,” Loeb wrote.


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