This content is from: Portfolio
The Morning Brief: Starboard Target Yahoo to Sell Assets to Verizon
It’s the end of an era. Yahoo!, a company synonymous with the early days of the Internet and one-time dotcom stalwart, agreed to sell its web assets to Verizon Communications for $4.83 billion after putting itself on the market several months ago. As reports have noted, this is a staggering decline from its peak valuation of more than $125 billion during its heyday in 2000 — and well below the rejected $45 billion offer Microsoft made to buy the company in 2008 — and marks an embarrassing end for Marissa Meyer, the Google executive hired to great fanfare in 2012 to turn the struggling company around. Yahoo! was perhaps the first brand-name search engine, but when Google came along with vastly superior search technology, Yahoo! struggled for years to reinvent itself and adapt to the changing worlds of social media and mobile advertising at the same time that competitors like Facebook and Google flourished.
The deal will also merge Yahoo! with onetime rival AOL. Both companies have been a target of Jeffrey Smith’s New York hedge fund firm Starboard Value, which has been highly critical of Meyer’s management and currently occupies nearly half the company’s board seats. The deal does not include the sale of Yahoo’s stake in Chinese e-commerce giant Alibaba Group Holding and Yahoo Japan Corp., which the Wall Street Journal notes make up the majority of the company’s $36 billion market value.
Richard (Mick) McGuire III’s San Francisco-based Marcato Capital Management said in a regulatory filing on Monday that it has taken a 5.1 percent stake in Buffalo Wild Wings, a Minneapolis, Minnesota-based restaurant chain. The stake amounts to 950,000 shares. The filing notes in typical boilerplate language that Marcato has held and will continue to hold discussions with management concerning various ways to enhance shareholder value. These include improving returns on invested capital, changing incentive compensation, optimizing the company’s mix of francise versus company-owned units, etc. The restaurant chain’s shares closed up 5.82 percent on the news, at $148.96.
David Tepper’s Miami-based Appaloosa Management and New York-based alternative asset manager Brookfield Asset Management are pairing up to bid for bankrupt energy company SunEdison’s stake in TerraForm Power, a yieldco formed by SunEdison, according to a regulatory filing. Tepper had been pushing for changes at TerraForm since taking a stake in the company last year. Brookfield owns about 11.1 million of TerraForm Class A shares, or 12 percent of the company, according to Bloomberg, while Appaloosa owns about 8.7 million shares, or 9.5 percent of the company.
Outsource CIO firm Partners Capital hired Richard Scarinci as a partner to lead the firm’s $6 billion of existing North American client accounts and to bolster its research efforts to find top liquid alts managers. He joins from Blackstone Alternative Asset Management, where he was a managing director and co-portfolio manager within the firm’s Hedge Fund Solutions Group. Scarinci was named an Institutional Investor Hedge Fund Rising Star in 2015.
Hedge fund administration giant Citco is getting into the capital advisory business. The firm said yesterday it has launched Citco Capital Solutions, a service that will arrange debt and equity capital for sponsors and investors in alternative investment funds. Michael Peterson, a veteran of Citco who has helped to develop the firm’s private equity and real estate businesses, will lead the effort. The firm has also hired Shiraz Allidina for the new effort. He previously worked as an advisor to TPG Special Situations Partners and was a partner at Bridgeway Partners, a boutique advisory firm that handles commercial real estate debt and equity placement.
July has been kind to hedge funds, at least according to the latest weekly report from Lyxor Asset Management. The firm’s Lyxor Hedge Fund Index is up 1.6 percent for the month through July 19. The best-performing strategies for the month are Event Driven (with a 1.9 percent gain), which Lyxor attributes to an increased risk appetite among event-driven managers. Meanwhile, CTAs are down for a second week in a row due to a rise in sovereign bond yields. They are now down 0.5 percent month-to-date.