Marissa Mayer won't be on Yahoo's board after Verizon completes the deal
AP Photo/Julie Jacobson
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The struggling Internet company announced that its board of directors will continue working without Yahoo CEO Mayer when Verizon finally makes up its mind about the acquisition.

Yahoo's filing with the Securities & Exchange Commission that was shared yesterday evening sheds light on the months-long acquisition process of the 21-year old company by a media conglomerate Verizon (NYSE: Verizon Communications [VZ]). According to the filing, Yahoo (NASDAQ: Yahoo! [YHOO]) will split into two companies as a result of the buyout: a separate holding company as well as the content and service enterprise, with the latter one being acquired by Verizon Communications for $4.8 billion.

The holding company of Yahoo holds a 36% stake in Yahoo Japan as well as a 16% stake in Alibaba, yet it has no actual products or registered employees. That part of the company will not be affected by the acquisition and will function as a separate entity under a new name, Altaba, explained the company.

Interestingly, Yahoo's holding company accounts for most of the firm's value thanks to proceeds from the stakes in Alibaba and Yahoo Japan. The core business that includes the search engine, email and other web services generates not more than 10% of the entire Yahoo's market value, explains the Wall Street Journal. As a result of the split, Yahoo's board of directors will also be reshuffled. Out of 11 members of today's board of directors, five will resign, as explained in the SEC filing. Among those five is also Yahoo CEO Marissa Mayer, who will not play a central part in the company after the acquisition is finalized.

"The intention to resign is not due to any disagreement with the Company on any matter relating to the Company’s operations, policies or practices," said the filing.

Back in July, when the acquisition plans were first announced, Mayer addressed Yahoo employees in a memo, saying that she has all intentions to stay in the company after the buyout. Although, it was not clear already then how her current position would translate into a new divided company.

"For me personally, I’m planning to stay. I love Yahoo, and I believe in all of you. It’s important to me to see Yahoo into its next chapter," she wrote in the memo.

However, analysts are unsure whether Mayer will be part of the acquired company or not, as the only mention of her in the SEC filing referred to her resignation as a member of the board of directors. In case Mayer does get fired from the company, she will receive quite a hefty amount to make up for that. According to Yahoo's SEC filing from April, Mayer will receive as much as $55 million if her contract is terminated within 12 months of Yahoo being sold to another company. This amount includes $3 million in cash as well as a package of stock benefits and grants that is worth up to $51.8 million, as reported by Variety. Although, if Mayer gets fired without Yahoo being acquired, her compensation would amount to only $9 million.

Still unsure

The $4.8 billion acquisition is still not confirmed but is likely to be finalized by the second quarter of this year, says the Guardian. However, Bloomberg revealed earlier today that Verizon's executives decided to postpone the definitive decision on the controversial acquisition for a few weeks because of the news of two major security breaches in Yahoo's web services that were recently uncovered.

“Right now as I’ve said, there’s a lot of stuff we don’t know. Obviously, with the second breach, there’s a lot of work that has to happen, so I’m not gonna put a timeframe on it. I honestly don’t have a timeframe. We don’t have a desire to have it drag on forever. That’s not our intent, but we have to be responsible for the business and to everyone that invests in Verizon,” Verizon's executive Marni Walden said during a conference last week.

With that in mind, investors shouldn't expect that the acquisition will be finalized any time soon. Even though Verizon is still interested in integrating Yahoo into its strategy, the $4.8 billion price tag of the deal is likely to be renegotiated, added Bloomberg. The second hack that was discovered in December was the turning point in negotiations between the companies, as Verizon claimed it had been unaware of these facts prior to making an agreement.

Spying news put Yahoo's buyout deal with Verizon in danger

Back then, Yahoo admitted that personal information of over 1 billion user accounts was stolen in 2013, which comes on top of another hack that affected 500 million accounts. For Verizon, this was a serious enough reason to "kill the deal" or renegotiate the terms, the company's legal team commented in December.

"If they're only coming out with details of these two hacks now, who knows what's happened in the time since?" If you were buying this business you would want two things – firstly, some forensic consultants to come in to scan the entire system and ensure there's nothing else," said an analyst Paraag Amin, as reported by Daily Mail.

More news on the acquisition are expected to come in the next weeks as Verizon finalizes its investigation.

The EU gives an approval to Verizon's acquisition of Yahoo
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