Nobody Puts Dan Loeb in the Corner: Third Point Begins Proxy Bombing Yahoo in 3 … 2 … 1
Yahoo just got yet another poison-pen letter from activist investor Dan Loeb of Third Point, which says the company has been “dismissive” of his alternate slate of board members, including former NBC head Jeff Zucker.
It is another doozy, full of all kinds of interesting details and signals, which I will go into more detail about below, although the main message is: Perhaps it is actually time for a proxy fight.
Wrote Loeb to Yahoo CEO Scott Thompson: “The Board’s stonewalling, apparent insouciance and decision not to engage with us in a serious manner, has left us no choice but to directly approach our fellow owners with the Shareholder Slate. Accordingly, we hereby notify you that we intend to file our Preliminary Proxy Statement with the Securities and Exchange Commission within the week.”
Before the battle begins, let me just note: Who uses the great word “insouciance” anymore? Kudos, Dan! (It means indifference, Cliff Clavin.)
In an e-mailed statement, Yahoo said: “As previously stated, in order to achieve the best possible outcome for all Yahoo! shareholders, the Board’s nominating and corporate governance committee continues to review a wide range of highly qualified candidates. The committee has included Third Point’s candidates in its thorough review process and will make its recommendations to the full Board in due course.”
The Silicon Valley Internet giant also sent this turgid (look it up!) explanation of how proxy fights go down:
Yahoo! will be filing a proxy statement with the SEC in connection with the solicitation of proxies for its 2012 annual meeting of stockholders. Stockholders are strongly advised to read Yahoo!’s 2012 proxy statement (including any amendments or supplement thereto) when it becomes available because it will contain important information. Stockholders will be able to obtain copies of Yahoo!’s 2012 proxy statement, any amendments or supplements to the proxy statement, and other documents filed by Yahoo! with the SEC in connection with its 2012 annual meeting of stockholders for no charge at the SEC’s website at www.sec.gov.
Yahoo!, its directors, executive officers and certain employees may be deemed participants in the solicitation of proxies from stockholders in connection with Yahoo!’s 2012 annual meeting of stockholders. Information concerning the ownership of Yahoo! securities by Yahoo!’s directors and executive officers is included in their SEC filings on Forms 3, 4 and 5, and additional information is also available in Yahoo!’s proxy statement for its 2011 annual meeting of stockholders filed with the SEC on April 29, 2011. Information regarding Yahoo!’s directors, executive officers and other persons who may, under rules of the SEC, be considered participants in the solicitation of proxies for the 2012 annual meeting of stockholders, including their respective interests by security holdings or otherwise, also will be set forth in the definitive proxy statement for Yahoo!’s 2012 annual meeting of stockholders when it is filed with the SEC.
One interesting part of the Loeb’s much more sassy letter is a suggestion at the bottom about Yahoo’s lack of a chairman when current head Roy Bostock steps down later in the year. Loeb’s idea is to keep on Gary Wilson, former CFO of Disney and Marriott, who was also leaving, in that role for one year.
“We believe this role should be for one year only, with the explicit understanding that Mr. Wilson would recruit his replacement prior to the end of the term,” wrote Loeb, who appears to be sending a none-to-subtle smoke signal that this might have been discussed already. “We suggest this in the spirit of continuity and compromise, and believe it would be in the best interests of all shareholders. We encourage the Company and Mr. Wilson to strongly consider this idea.”
The letter is a bit of a olive branch, followed by a swift kick, presumably an attempt by Loeb to get Yahoo to start taking him more seriously.
“Scott, it is not too late for you to take decisive leadership action and avoid the costs and distraction of an expensive proxy contest fighting the Shareholder Slate (which, according to our research, will be well-received by shareholders),” Loeb noted archly, before referring to Yahoo’s current lawsuit against Facebook over patent infringement. “You appear to have enough battles to fight already.”
In other words, if you prefer the “Fatal Attraction” movie metaphor rather than from “Dirty Dancing,” Loeb is not going to be ignored!
Oh, read it all for yourself — here’s the full letter: