Yahoo Forms Independent Committee to Explore Possible Sale

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Yahoo CEO Marissa MayerThe Board of Directors of Yahoo! Inc. (NASDAQ: YHOO) created an Independent Committee
to explore and review strategic alternatives including a possible sale of its core assets as it continues to consider its planned reverse spinoff.

In a statement, Yahoo CEO Marissa Mayer said it is essential for the company to separate its stake in Alibaba Group Holding (NASDAQ:BABA) to maximize value for shareholders.

Mayer added that the company could pursue other strategic options in addition to the reverse spinoff to achieve the separation. According to her, they want to return Yahoo to its greatness, and working with the independent committee is the best way to realize that goal.

The technology company owns 15% of Alibaba valued at around $25 billion. Yahoo shareholders such as Starboard Value have been demanding the company to divest is Asian assets and to sell its core business.

Yahoo’s announcement came following a report that Starboard Value was preparing to launch a proxy fight to gain control of the company’s Board.

Brian Wieser, an analyst at Pivotal Research commented, “It seems pretty clear that the only reason this is happening is because of the threat of the proxy fight.”

Executing strategic plan to drive growth

Furthermore, Mayer said the management is executing its strategic plan to strengthen the growth of the company’s businesses and to improve efficiency and profitability.

Earlier this month, Mayer announced the company’s strategic plan to drive growth including cutting costs worth $400 million, closing offices, reducing its workforce by 15%, and generating more than $1 billion cash from divesting non-strategic assets.

Yahoo Chairman Maynard Webb said the independent committee with the help of excellent advisors, are pursuing an effective process to evaluate strategic options for the company.

“The Board is thoroughly committed to exploring strategic alternatives while simultaneously supporting management and the employee in their implementation of Yahoo’s strategic plan. We believe that pursuing these complementary paths is in the best interests of our shareholders and maximize value,” said Webb.

The Committee engaged the services of Goldman Sachs & Co., JP Morgan Chase and PJT Partners as financial advisors. The company also hired Caravath, Swaine & Moore LLP as legal advisors.

The advisors are working on a process to contact potential buyers or strategic partners and engaged them into discussions for possible transactions. The Committee will recommend to the Board any proposed deal that is in the best interest of the company and shareholders.

SpringOwl to continue advocating for change at Yahoo

In response to Yahoo’s announcement, SpringOwl Management, one of the shareholders, commented, “It is clear the company is continuing to respond to our calls for change with its expressed commitment to trimming its workforce and forming a committee to explore strategic alternatives.”

SpringOwl vowed to continue to advocate for change and support steps by the company that will boost its stock price and create value for shareholders.

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