Loeb quits board as Third Point sells back Yahoo

ACTIVIST hedge fund Third Point reached an agreement to sell two-thirds of its stake in Yahoo back to the company for $29.11 a share yesterday, sending stock in the internet company down nearly five per cent.

Three Yahoo board directors appointed by Third Point, including Daniel Loeb, the hedge fund’s chief, will resign from Yahoo’s board. Third Point will still own about 20m shares, less than two per cent of common stock.

Third Point’s decision to sell shares in Yahoo comes as the struggling internet company’s stock has surged more than 80 per cent during the past 12 months, due largely to aggressive share buybacks and the value of Yahoo’s Asian assets.

It was not immediately clear why Third Point was selling its shares now. Third Point declined to comment, but Loeb expressed his confidence in Yahoo’s prospects in a statement.

Given the gains in Yahoo’s shares, Third Point may have decided it was prudent to sell some of its holdings, said JMP Securities analyst Ronald Josey.

But Loeb’s move may be prompting other shareholders to similarly re-evaluate their investment, he said.

“Much like a lot of investors followed Third Point in, a lot will follow Third Point out,” Josey added.

Third Point settled a bitter proxy battle with Yahoo last year after months of criticising the company. Loeb was instrumental in selecting former Google executive Marissa Mayer to join Yahoo as CEO.