Yahoo comes under more pressure to sell its Internet business

Yahoo is coming under pressure from an additional shareholder, Canyon Capital, to sell core assets quickly. Yahoo, already pressed by activist shareholder Starboard Value, last week announced a move toward a sale of its Internet business.

On Tuesday, Canyon Capital sent a letter to Yahoo CEO Marissa Mayer, the company’s board, and its chief financial officer Ken Goldman, according to Reuters. “We remain concerned that the process is not moving as quickly as it should, and that Company management does not fully support the Board’s direction in this regard,” the letter said.

Starboard will continue to push to nominate a new Yahoo board, even after the company moved to sell the core, Reuters reported Saturday. On Feb. 6, Starboard managing member and founder Jeffrey Smith had sent a  letter to Yahoo’s board.

“Despite over three years of effort and billions spent on acquisitions, the management team that was hired to turn around the Core Business has failed to produce acceptable results, in turn, causing massive declines in profitability and cash flow. It appears that investors have lost all confidence in management and the Board,” Smith wrote.

SunTrust analyst Robert Peck has said he expects Yahoo’s core to sell for $6 billion to $8 billion, by the end of the second quarter.

Verizon has expressed interest in Yahoo. Other firms reportedly eyeing the assets include News Corp., IAC/InterActiveCorp and private equity company TPG. Peck believes AT&T, Comcast and Fox are also potential buyers, along with Alibaba or SoftBank, and a handful of private equity companies. Bloomberg has reported that Time, Inc. is also a possible purchaser.

A sale of Yahoo’s core would leave the company with its stake in Chinese e-commerce firm Alibaba, worth about $29.5 billion, and its holdings in Yahoo Japan.

Yahoo shares dropped briefly in early trading Wednesday to $29.87 after a $30.67 close Tuesday, but recovered by mid-morning Pacific time to $30.58.

 

Photo: Yahoo CEO Marissa Mayer (AP Photo/NBC/Peter Kramer)

 

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