Yahoo Forms Board Committee to Explore Options--2nd Update
February 19 2016 - 10:36AM
Dow Jones News
By Chelsey Dulaney
Yahoo Inc. said Friday that it has hired banking advisers and
formed a special committee to explore its strategic alternatives,
the latest indication that the Internet company is serious about
pursuing a possible sale.
The company said the committee and its advisers--which include
Goldman Sachs & Co. and J.P. Morgan Chase & Co.--are
creating a process for reaching out to potential interested
parties. Verizon Communications Inc. has been mentioned as a
possible acquirer, and the company's financial chief called Yahoo's
assets "intriguing" last month.
Other companies reportedly interested in Yahoo include The Wall
Street Journal owner News Corp, IAC/InterActiveCorp and the
private-equity firm TPG.
Yahoo said Friday that the committee will make recommendations
about any potential transactions. The company, though, also
reiterated its previously announced plan to split off its nearly
$40 billion of holdings in Alibaba Group Holding Ltd.
Shares of Yahoo rose 1.9% to $29.97 each in morning trading in
New York. Still, the stock price remains down more than 30% in the
past year.
Yahoo had said earlier this month that it would explore
strategic alternatives as part of a restructuring that will
eliminate roughly 15% of its workforce.
The launch of a formal sale process entails setting up a virtual
data room detailing the company's business metrics and proactively
reaching out to the most likely potential buyers. Estimating the
value of Yahoo's business is difficult, because investors ascribe a
large portion of its value to its stakes in Alibaba and Yahoo
Japan
The company has been facing pressure from shareholders,
including activist investor Starboard Value LP, which has pushed
for a sale of the company. The hedge fund also has called for the
resignation of Chief Executive Marissa Mayer and threatened a proxy
battle.
Ms. Mayer took the reins at Yahoo more than three years ago with
plans to return the company to a growth rate on par with competing
Internet companies such as Google Inc. and Facebook Inc. But
Yahoo's costs have continued to rise, while its revenue has shrunk
under her leadership. Her efforts also have been complicated in
recent months by an exodus of top managers and growing impatience
from investors.
In prepared statements Friday, Ms. Mayer reiterated that
separating the Alibaba stake "is essential to maximizing value for
our shareholders." Ms. Mayer added that "there are strategic
alternatives that could help us achieve the separation, while
strengthening our business."
Yahoo's move to explore its options sets the stage for a
possible bidding war between a wide range of potential buyers.
About 1 billion people a month travel collectively to Yahoo's home
page, email and other sites, making them an attractive asset to
media conglomerates, telecom giants and private-equity firms.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
(END) Dow Jones Newswires
February 19, 2016 10:21 ET (15:21 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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