Iconic tech company Yahoo has agreed to repurchase 40 million shares of stock from major stakeholder Third Point, the company announced today.
Under terms of the deal, the three directors originally nominated by Third Point — Daniel S. Loeb, Harry J. Wilson, and Michael J. Wolf — have also submitted their resignations from Yahoo’s board. Third Point, however, still owns 20 million shares of the company or 2 percent.
Thus far shareholders have reacted negatively to the news of Loeb and crew vacating the board, with the stock down about 4 percent to $27.93.
Yahoo said the transaction will be made in mostly cash and will help increase the company’s earnings per share. Third Point head Dan Loeb waged an intense proxy fight against Yahoo last year after determining that the company’s direction didn’t have shareholders’ interest at heart. Loeb was instrumental in ousting former Yahoo CEO Scott Thompson after it was revealed that Thompson had false information on his resume. Loeb and Third Point were also responsible in part for installing current chief executive Marissa Mayer at Yahoo.
And since Yahoo’s stock price is up over 80 percent since Mayer took over, it seems Third Point is ready to cash out on its investment.
“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,” Mayer said in a statement. “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.”