Yahoo! is to repurchase 40 million shares of Yahoo! common stock beneficially owned by hedge fund Third Point at a purchase price of USD29.11 per share.
The purchase price equals the closing price of Yahoo! common stock on 19 July 2013.
Following the repurchase, Third Point will beneficially own approximately 20 million shares, representing less than two per cent of Yahoo!'s outstanding common stock.
In accordance with the board's settlement agreement announced on 13 May 2012, each of the directors originally nominated by Third Point – Daniel S Loeb, Harry J Wilson, and Michael J Wolf -– have submitted their resignations from Yahoo!'s board of directors, effective 31 July 2013. The board will then comprise seven members. Max Levchin, who was appointed as a director upon mutual agreement between Third Point and the board, will remain on the board.
"Daniel Loeb had the vision to see Yahoo for its immense potential – the potential to return to greatness as a company and the potential to deliver significant shareholder value," says Yahoo! Chief executive Marissa Mayer. "On behalf of the board and our entire team, I'd like to take this opportunity to personally thank Dan, Michael, and Harry for the tremendous opportunities they created here at Yahoo!. They have been incredibly supportive as we have built our executive staff and developed our strategy, and they have helped position Yahoo! for future success. While there's still a lot of work ahead, they've given us a great foundation."
"Harry, Michael and I are pleased to have played key roles in Yahoo's resurgence since we joined the board last spring," says Third Point chief executive Daniel S Loeb (pictured). "Since our board's rigorous search led us to hire Marissa Mayer as CEO, Yahoo!'s stock price has nearly doubled, delivering significant value for shareholders. I'm confident that with Marissa at the helm and her team's focus on innovation and engaging users, Yahoo! has a bright future."
Yahoo! previously announced a plan to purchase an additional USD1.9bn of Yahoo! common stock; the new repurchase agreement becomes part of that plan. Upon completion of this repurchase, approximately USD700m will remain under the USD5bn buyback authorisation announced last year, on which the company plans to continue to execute. Yahoo! expects to fund the transaction primarily with cash, and the transaction is accretive to earnings per share (EPS).