Daily Management Review

Former Yahoo Executives Named by the Company Shareholders as Potential Mayer Replacement


12/15/2015




Former Yahoo Executives Named by the Company Shareholders as Potential Mayer Replacement
As Yahoo comes under pressure to change strategic direction, shareholders consider former Yahoo executives Ross Levinsohn and Jacqueline Reses as potential replacements for Chief Executive Officer Marissa Mayer.
 
New York-based SpingOwl Asset Management, a New York based activist hedge fund, said it has several people in mind to replace Mayer but is not yet backing one candidate, Eric Jackson, managing director of the firm said in an interview
 
The firm had sent sent a 99-page strategic analysis to Yahoo's board on Friday.
 
There have been several shareholder sin Yahoo who are voicing their frustration with Mayer and calling for a different path than the one Yahoo recently laid out and Jackson is among this growing list.
  
"(Former Yahoo interim CEO) Ross Levinsohn was passed over for the job four year ago. I think the basic strategy that he was advocating was in hindsight the right strategy," Jackson said.
 
He added that Reses is interesting because she is familiar with the company and also has a private equity background, having worked at Apax Partners before joining Yahoo. Reses was formerly chief development officer at Yahoo and left for payment processor Square in the fall.
 
"Whoever is the next CEO will need to take Yahoo core down to its studs in terms of its costs," Jackson said.
 
Yahoo declined to comment.
 
Under pressure from investors - including activist Starboard Value, Yahoo shelved plans to spin off its stake in Chinese e-commerce giant Alibaba Group Holding Ltd last Wednesday. The shareholders are worried about billions of dollars in tax liabilities that could weigh on the value of the entity.
 
In a strategy it is calling a "reverse spin" of its original plan, the company said that it would, instead, look at creating a separate company to hold the rest of its assets.
 
Mayer has the support of Yahoo's board and will be given time to work through the new plan to carry out the reverse spin, said media reports quoting people familiar with the matter. However, it could take at least a year to finish given the complex nature of the plan.
 
Voicing their opposition to the company's current path, Starboard Value and other shareholders are unlikely to share the board's patience and have have written letters to the Yahoo board.
 
Yahoo is being pushed to cut costs and bring in a strategic partner such as Liberty Media to help deal with tax issues by SpringOwl, a roughly $300 million fund managed by activist investor Jason Ader. SpingOwl has not revealed the size of its stake in Yahoo.
 
Yahoo should pursue a sale of the whole company or its various assets as soon as possible, demanded Canyon Capital Advisors LLC, which owns about 1.1 percent or 10 million shares in Yahoo, in a letter dated Dec. 11. The company is wasting too much time while its business erodes when the Yahoo says it will spend a year to evaluate the spinoff of the core business, Canyon feels.
 
Reuters has also reported that another top shareholder who did not want to be named, said that after the company announced the reverse spin plan, the fund wrote a letter to the board saying it should proceed to sell the core business instead.
 
(Source:www.reuters.com) 






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