Yandex (NASDAQ and MOEX: YNDX), one of Europe's largest internet
companies and the leading search provider in Russia, today
announces that its Board of Directors has approved targeted
amendments to the company’s corporate governance structure, as it
seeks to respond to an evolving regulatory environment while
supporting the company’s business interests and the interests of
all its stakeholders.
The proposed amendments will be subject to
shareholder approval at a Meeting of Class A Shareholders and an
Extraordinary General Meeting of Shareholders, both scheduled to
take place on December 20, 2019.
“I am pleased to endorse the proposed
amendments,” said John Boynton, Chairman of the Board of Yandex.
“They are good for Yandex and good for our shareholders.”
“It is clear that Yandex has to adapt to the
evolving legal and regulatory environment in Russia. As a Board, we
carefully evaluated many different approaches, recognizing the
importance of balancing the interests of a number of different
stakeholders. The proposed amendments balance the concerns of
public authorities in our core market with the interests of our
shareholders, our employees and our users.”
The amendments include the creation of a Public
Interest Foundation (PIF), with no economic rights, but with
certain limited governance rights. The Company’s Priority
Share, currently held by Sberbank, will be transferred to the PIF
and its terms will be amended. The amended Priority Share will give
the PIF the right to block the accumulation by a single entity, or
a group of related parties acting in concert, of shares
representing 10% or more of economic or voting interests in Yandex
(compared with the current threshold of 25%).
The Priority Share will also give the PIF the
right to make binding nominations of two members of the Yandex NV
twelve-person Board (“Designated Directors”). One of the Designated
Directors will serve on the Nominating Committee of the Yandex NV
Board, where he will have a say over the nomination of four Yandex
NV directors.
The PIF’s two Designated Directors will also
serve on a newly created Public Interest Committee of the Yandex NV
Board, which will have oversight over a limited and clearly defined
set of questions deemed to be of public interest:
- Transactions involving the sale or
transfer of material intellectual property
- Transactions involving the sale or
transfer of Russian users’ personal data to non-Russians
- Changes to Yandex internal policies
on protection of Russian users’ personal data
- Entry into agreements with a
non-Russian state or international intergovernmental
organizations
As additional support for the protective rights
of the PIF, we propose to issue a Special Voting Interest in Yandex
LLC, our principal operating subsidiary. The Special Voting
Interest will allow the PIF to temporarily replace the General
Director of our principal Russian subsidiary in certain exceptional
circumstances, a list of which is described in the Shareholder
Circular. Importantly, the PIF will not have any other control over
Yandex’s business and operations.
The PIF will be governed by a board comprising
11 directors, including representatives from five leading Russian
universities (Higher School of Economics, Moscow Institute of
Physics and Technology, Moscow State University, St Petersburg
State University and the St Petersburg National Research University
of Information Technologies, Mechanics and Optics) and three
non-governmental institutions (the Russian Union of Industrialists
and Entrepreneurs (RSPP), Moscow School of Management Skolkovo and
the Endowment of Moscow School #57), all of which have long and
successful histories of cooperation with Yandex. The PIF Board will
also include three representatives of Yandex management (Arkady
Volozh, Tigran Khudaverdyan and Elena Bunina).
The proposed amendments also provide additional
rights to Class A shareholders, including a requirement for
separate approval by the Class A shareholders of certain material
transactions, including a substantial issuance of shares.
In addition, as part of the proposed
restructuring, in order to address the “single-man risk”, we are
proposing an amendment to the automatic conversion feature of the
Class B Shares. Currently, such shares would immediately convert
into Class A Shares upon the death of the holder. To avoid this
“cliff-edge” scenario, in which the voting control of the Company
could suddenly shift, the amendment would provide that Class B
Shares held by a family trust will not automatically convert for a
period of two years. Mr. Volozh intends to establish such a
trust.
Mr. Volozh has also agreed to enter into a
two-year lock-up agreement with respect to 95% of his Class B
Shares, thereby providing an additional layer of assurance that
there will be no abrupt change in our voting structure.
“In our 22-year history, Yandex has consistently
developed world-class services, which today play an important role
in the lives of millions of people in Russia, and we continue to
develop new ideas that will shape the future of the Russian and
global tech sector,” said Arkady Volozh, Chief Executive Officer of
Yandex. “We already have one of the only sizeable online taxi
businesses in the world that is profitable, and still growing fast.
We have some of the best self-driving car technology in the world.
And you just have to look at what we are doing with our core search
business, our personalized social platform Zen, Cloud and many
other businesses to see that the possibilities are endless.”
“I am very committed to this business and urge
our shareholders to support the proposals we are announcing today,”
continued Mr. Volozh. “With this behind us, we can get back to
doing what we do best: innovating, providing world-class products
and services to our users, and delivering superior returns to our
investors.”
The proposed amendments are subject to
shareholder approval, including the separate approval of the Class
A shareholders. Notice has been given today of a meeting of the
Class A shareholders and an Extraordinary General Meeting of
Shareholders, both to be held on December 20, 2019. Shareholders of
record as of 11:59 p.m. on November 22, 2019 will be entitled to
receive notice of and to vote at the meetings.
Copies of the Notices and accompanying
Shareholder Circular are available at
https://ir.yandex/shareholder-meetings or by request from
askIR@yandex-team.ru, and will be posted to shareholders of record
on the record date. Shareholders are urged to read the Notices and
Shareholders Circular for details of the proposed
restructuring.
The Board of Directors of Yandex recommends that
shareholders vote in favor of all resolutions set out in the
Notices and the accompanying Shareholders Circular.
The company will hold an investor conference
call today to discuss the proposed restructuring at 8:00 AM U.S.
Eastern Time (4:00 PM Moscow time; 1:00 PM London time).
CONFERENCE CALL INFORMATION
Yandex’s management and Chairman of the Board
will hold a conference call to discuss the proposed restructuring
on November 18, 2019 at 8:00 AM U.S. Eastern Time (4:00 PM Moscow
time; 1:00 PM London time).
To access the conference call live, please
dial:US: +1 866 966 1396UK/International: +44 (0) 844 571
8892Russia: 8 10 800 2357 5011Passcode: 6066482
A replay of the call will be available until
November 25, 2019. To access the replay, please dial:US: +1 917 677
7532UK/International: +44 (0) 844 571 8951Russia: +7 495 249
9138Passcode: 6066482A live and archived webcast of this conference
call will be available at
https://edge.media-server.com/mmc/p/fv9a4tkh
ABOUT YANDEX
Yandex (NASDAQ:YNDX) is a technology company
that builds intelligent products and services powered by machine
learning. Our goal is to help consumers and businesses better
navigate the online and offline world. Since 1997, we have
delivered world-class, locally relevant search and information
services. Additionally, we have developed market-leading on-demand
transportation services, navigation products, and other mobile
applications for millions of consumers across the globe. Yandex,
which has 34 offices worldwide, has been listed on the NASDAQ since
2011. More information on Yandex can be found at
https://yandex.com/company.
FORWARD-LOOKING STATEMENTS
This press release contains forward-looking
statements that involve risks and uncertainties. These include
statements regarding the approval, implementation and impact of the
proposed restructuring of our capital and governance structure.
Actual results may differ materially from the results predicted or
implied by such statements. The potential risks and uncertainties
that could cause actual results to differ from the results
predicted or implied by such statements include, among others,
geopolitical developments affecting Russia or our business and
changes in the political, legal and/or regulatory environment, as
well as those risks and uncertainties included under the caption
“Risk Factors” in our Shareholders Circular dated November 18, 2019
and our Annual Report on Form 20-F for the year ended December 31,
2018, each of while is on file with the U.S. Securities and
Exchange Commission (SEC) and is available on our investor
relations website at http://ir.yandex.com/sec.cfm and on the SEC
website at www.sec.gov. All information in this release and in the
attachments is as of November 18 , 2019, and Yandex undertakes no
duty to update this information unless required by law.
CONTACTSInvestor
RelationsKatya ZhukovaPhone: +7 495 974-35-38E-mail:
askIR@yandex-team.ru
Media RelationsIlya
GrabovskiyPhone: +7 495 739-70-00E-mail: pr@yandex-team.ru
Tom BlackwellPhone: +7 919 102 9064 / +44 7412
193 945E-mail: blackwell@em-comms.com
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