Yahoo! goes private? Is this Marissa Mayer’s latest gambit?

SUMMARY:

The latest twist in the Yahoo! story sees the various interested parties getting tooled up for a fight, while CEO Marissa Mayer chases taking the firm private. Someone has to make a movie of this.

Marissa Mayer
Marissa Mayer

The Yahoo! saga keeps on giving, with the latest round of scuttlebutt serving to add weight to the idea that the Board of Directors and CEO Marissa Mayer aren’t entirely on the same page about what happens next.

I suggested last month that tensions appeared to leaking into the semantics with Mayer talking about the Board in the third person after it announced plans to “explore strategic alternatives”, while referring to her own rescue plan in terms of “us” and “we”.

The Board last week confirmed it’s set up a committee of independent directors to evaluate offers to buy the company’s core assets and make recommendations to the board. Mayer is not part of that committee and it can act without her approval of its recommendations.

In today’s latest development, the Yahoo! CEO is reported to be seeking to take the firm privately-held, with investment banker Frank Quattrone approaching private equity firms on her behalf to get them to bankroll this.

According to the New York Post, Mayer herself has now headed to the Big Apple to make the case, citing TPG, KKR and Bain Capital as among PE firms that have stakes in Yahoo!

With a looming proxy battle with activist hedge fund Starboard Value, which has made no secret of wanting top level management changes made now, the most popular interpretation of Mayer’s tactics here is that she wants to buy more time as CEO in pursuit of her own turnaround plans.

But more pressure was brought to bear earlier this week when a second hedge fund, Canyon Capital Advisors, stated, in a letter made public in a regulatory filing, that it remains concerned that progress towards a sale is too slow and that:

management does not fully support the board’s direction in this regard.

For management, read Mayer.

Canyon Capital Advisers letter reads:

Recent news reports indicate that, while there have been numerous expressions of interest, lack of engagement on the part of the company has been a source of frustration to potential buyers…While there obviously are complexities to any sales process, delay at this stage is unwarranted for any reason.

With AT&T set to make its own bid in the coming days and others such as Comcast and Verizon still to show their hands, the clock is ticking down fast. Some commentators have suggested that Mayer’s fate will be decided by March.

And when you realise that March starts next week, things are clearly coming to a head.

My take

This is getting bloody now and everyone’s getting tooled up.

The Yahoo! board has hired Evercore and Innisfree,  two firms that specialize in minimizing ‘interference’ from activist investors.

Starboard Value has hired Okapi Partners, which specializes in stirring up investors to activist pushes.

And Mayer appears to have hired her own financial fixer in the shape of Quattrone, with no clarity so far as to whether this is coming out of her personal purse or the corporate Yahoo! one.

Someone’s got to make a movie of this once the dust settles. Kate Winslet is ‘Marissa!’, anyone?

Meanwhile, as Mayer’s own job hangs in the balance, Yahoo!’s begun laying off 15% of its global workforce as the latest iteration of her rescue plan for the company kicks in.

Just a mess.