Yahoo! Inc. investor Third Point LLC ramped up pressure on the company’s board, saying it may add to its 5.2 percent stake and reiterating a demand that Chairman Roy Bostock step down.
Daniel Loeb, chief executive officer of Third Point, said he’d seek U.S. approval to buy more stock and criticized Bostock’s oversight of the company in a letter today to Yahoo co-founder Jerry Yang, according to a regulatory filing.
“We urge you to do the right thing for all Yahoo shareholders,” Loeb said in the letter to Yang. “We are prepared to support you and present you with suggestions on candidates who could help bring Yahoo back to its rightful place among the world’s top digital media and technology companies.”
Loeb said he told Bostock and Yang in a Sept. 12 phone conversation that he planned to “pursue whatever efforts were necessary to remove Mr. Bostock from the board,” according to the filing. The dialogue ended when “Bostock terminated the call,” Loeb said.
Bostock fired Yahoo CEO Carol Bartz by phone last week after less than three years on the job. Bartz was hired to help Yahoo revive the Web portal’s sales growth and boost its shares after the 2008 decision to reject a $47.5 billion offer from Microsoft Corp.
Third Point on Sept. 8 raised its stake in the company to 5.2 percent and said it was “prepared to propose a slate of directors at the company’s annual meeting next year should it become necessary,” according to a filing that day.
Bostock didn’t immediately respond to a request for comment. Charles Sipkins, a spokesman for the board, declined to comment beyond his response to the filing last week.
“The Yahoo board recognizes the critical challenges facing the company and appreciates constructive input from all shareholders,” Sipkins said in a Sept. 8 statement.
Yahoo, based in Sunnyvale, California, rose 30 cents, or 2.1 percent, to $14.55 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have dropped 13 percent this year.
Bostock has been embattled from his first day as Yahoo chairman. On Feb. 1, 2008, Microsoft announced a $31 a share, or $44.6 billion, offer for the company. While Yang, who was then CEO, handled much of the negotiations with Microsoft, it was Bostock who co-signed a June 12 letter announcing that takeover talks were over and saying Yahoo had better prospects going it alone. They termed Microsoft’s bid, though sweetened to $33 a share, or $47.5 billion, “not in the best interests of Yahoo stockholders.”
Icahn Proxy Fight
Investor Carl Icahn, who bought 59 million shares of Yahoo that May, said Yang and other directors were a “self-destructive doomsday machine” and vowed a proxy battle to change the board’s makeup.
Yahoo reached an accord with Icahn in July 2008, giving him three board seats and expanding the number of directors from eight to 11. Icahn sold the last of his Yahoo stake in the third quarter of 2010. He left the Yahoo board in 2009, and the other two Icahn representatives departed last year.