Yahoo! Inc., owner of the largest U.S. Web portal, urged its shareholders to support its board candidates, rather than nominees put forward by shareholder Third Point LLC.
“Regrettably, our efforts to avoid a proxy contest with Third Point were unsuccessful,” Yahoo said in a letter to investors today. Third Point Chief Executive Officer Daniel Loeb insisted that there could be no settlement unless he was personally appointed to the board, Yahoo said.
Yahoo has come under investor scrutiny after losing ground to rivals Google Inc. (GOOG:US) and Facebook Inc. (FB:US) and posting three years of declining sales. New CEO Scott Thompson, who joined in January after his predecessor Carol Bartz was ousted, is trying to drive a turnaround by focusing on growth and shrinking costs.
The Sunnyvale, California-based company’s committee for nominating board members identified more than 100 potential candidates, according to the letter, and engaged with 20 of them, including the nominees from Third Point. The candidates picked at the end of the process are “significantly superior” to those proposed by Third Point, Yahoo said.
Yahoo shares rose less than 1 percent to $15.67 at the close in New York. The stock has fallen 2.9 percent this year. Third Point held 5.8 percent of the stock as of March.
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