Recent Yahoo sale news revealed that the Internet giant has finally bowed to activist hedge fund Starboard Value LP. The company has agreed to add four new members to its board.
Reuters reported that Yahoo has finally reached a deal with Starboard to introduce four new independent directors to its board. The agreement showed that the company's board and management were pressed by major shareholders to settle the proxy battle.
This would greatly help the Internet giant especially with the looming Yahoo sale. Starboard chief executive Jeffrey Smith as well as three independent directors will be joining the company's board as soon as possible.
Sources involved in the negotiations admitted that Yahoo and Starboard has often discussed ways to "avoid putting the fate of the board in the hands of shareholders." Smith is also said to join the company's strategic review committee.
"The decision point for Smith was, 'Do we want to be inside the tent when a deal goes down or do we want to be sitting on the outside hoping the board does the right thing?'" Eric Jackson, managing director at SpringOwl Asset Management, said. SpringOwl is a fund that owns Yahoo shares.
Two incumbent Yahoo directors, Lee Scott and Sue James, will be stepping down at the annual meeting. The company's board will soon have 11 members, including the four new directors.
There is no formal date set yet for Yahoo's annual meeting this year. It is usually held in late June, though.
According to Business Insider, the settlement could mean that Marissa Mayer's time with Yahoo may be coming to an end. The activist company has been vocal about bringing "significant changes" to the Internet giant's executive-leadership team.
"The clock is ticking. I think the sale is a forgone conclusion now, so it's unlikely that Mayer will stay on with whoever buys the core business," Jackson added. Moreover, the company that wins the Yahoo sale will most likely want a new leadership team for the business.
