NEW YORK (
(YHOO - Get Report)
announced it would be buying back two-thirds of hedge fund
stake in the Internet giant, spending $1.2 billion to do so.
Third Point, which was instrumental in getting Marissa Mayer to take the CEO job at Yahoo!, will now own approximately 20 million shares in the company, or less than 2% of the outstanding stock. In conjunction with this move, three directors which Third Point's Daniel Loeb was instrumental in appointing to Yahoo!'s board -- Loeb himself, Harry J. Wilson, and Michael J. Wolf -- will resign from the board on July 31. Max Levchin, who was appointed as a director upon mutual agreement between Third Point and the board, will remain.
Third Point could not be immediately reached for comment on this story.
Following the buyback, Yahoo! will have $700 million under a previously announced $5 billion buyback plan that was introduced last year.
Last week, Yahoo! reported
that beat Wall Street earnings estimates.
"Daniel Loeb had the vision to see Yahoo! for its immense potential -- the potential to return to greatness as a company and the potential to deliver significant shareholder value," CEO Mayer said in a statement regarding the transaction. "On behalf of the Board and our entire team, I'd like to take this opportunity to personally thank Dan, Michael, and Harry for the tremendous opportunities they created here at Yahoo!. They have been incredibly supportive as we have built our executive staff and developed our strategy, and they have helped position Yahoo! for future success. While there's still a lot of work ahead, they've given us a great foundation."
In the release, Loeb noted that Yahoo!'s share price has nearly doubled since Mayer took over the
in Sunnyvale, Calif., and he continues to support
for the company.
"I'm confident that with Marissa at the helm and her team's focus on innovation and engaging users, Yahoo! has a bright future," Loeb said.
Loeb is currently embroiled in a battle with another technology company. The activist investor is currently having
(SNE - Get Report)
on how to enhance shareholder value. One option involves spinning off Sony's entertainment business, which Loeb has said previously he would be willing to back stop in an initial public offering.
Following the announcement, shares of Yahoo! dropped sharply, falling 3.6% to $28.07.
Written by Chris Ciaccia in New York