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Strategies & Market Trends : Speculating in Takeover Targets

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From: Glenn Petersen

2/19/2016 9:50:26 AM

of 7253

Yahoo Hires Bankers as Board Explores Options

J.P. Morgan and Goldman Sachs are among the bankers brought on to work with an independent committee

By Chelsey Dulaney
The Wall Street Journal
Updated Feb. 19, 2016 8:34 a.m. ET

Yahoo Inc. YHOO 1.08 % said Friday that it has formed a special committee to explore its strategic alternatives, while it continues to consider spinning off its nearly $40 billion of holdings in Alibaba Group Holding Ltd. BABA -0.56 %

Shares of the company rose 2.9% to $30.27 in premarket trading.

Yahoo said the committee of independent directors is creating a process for reaching out to potential interested parties. Yahoo said it has brought on Goldman Sachs & Co., J.P. Morgan JPM -0.86 % and PJT Partners Inc. PJT 0.56 % as financial advisers.

Yahoo had said earlier this month that it would explore strategic alternatives as it also announced plans to cut about 15% of its workforce. The company has been facing pressure for shareholders and activist investor Starboard Value LP, which has pushed for a sale of the company. The hedge fund also has called for the resignation of Chief Executive Marissa Mayer and threatened a proxy battle.

In prepared statements Friday, Chief Executive Marissa Mayer reiterated that separating the Alibaba stake “is essential to maximizing value for our shareholders.” Ms. Mayer added that “there are strategic alternatives that could help us achieve the separation, while strengthening our business.”

Yahoo’s move to explore its options sets the stage for a possible bidding war between a wide range of potential buyers. About 1 billion people a month travel collectively to Yahoo’s home page, email and other sites, making them an attractive asset to media conglomerates such as The Wall Street Journal owner News Corp NWSA 0.05 % and IAC/InterActiveCorp, IAC -0.67 % telecom giants including Verizon Communications Inc. VZ -0.51 % and private-equity firm TPG—all of which have expressed interest in purchasing parts or all of the business, people familiar with the matter have said.

Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com

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