Starboard Value, the activist investor, headed by Jeffrey Smith, will launch a proxy fight to replace all the members of the Board of Yahoo! Inc (NASDAQ:YHOO), according to the Wall Street Journal.
The activist investor is expected to announce the names of its nominees to the Yahoo Board on Thursday morning Eastern Time. Currently, the technology company’s Board has nine members including its CEO Marissa Mayer.
Earlier this month, Yahoo appointed two new independent directors, Catherine J. Friedman, a former managing director at Morgan Stanley (NYSE:MS) and Eric K. Brandt, a former chief financial officer at Broadcom Corporation (NASDAQ: BRCM. The company made the appointment ahead of its scheduled discussions with Starboard.
Yahoo failed to fulfill its promises
Starboard indicated in a letter, which was reviewed by that WSJ that it is seeking to oust the Yahoo Board because of its failure to fulfill its promises made earlier. The activist investor also believes that the Board was incapable of making a decision whether the company should remain as an independent company.
Earlier this year, Starboard expressed frustration on Yahoo’s performance and demanded significant changes in the leadership, execution, and strategy of the company. The activist investor asked the company to consider selling its core internet business.
Yahoo strategic plan
Last month, Yahoo formed an Independent Committee to explore the possible sale of its core business as it continues to consider its planned reverse spinoff.
Prior to that, the company announced a strategic plan to drive growth including c cutting costs worth $400 million, closing offices, reducing its workforce, and divesting non-strategic assets to generate more than $1 billion in cash.
There had been speculations that there is a conflict between the Board and management of Yahoo. CFO Ken Goldman rejected the rumors and made it clear that the company’s Board and management team are aligned when it comes to creating the best value for shareholders.
Last week, Goldman said, “There are tons of people who are pulling for us, including many, many investors who may not be that outspoken.”
, according to the Wall Street Journal.){kind=link}