In a letter to Yahoo! ( YHOO) employees, Chief Executive Jerry Yang has confirmed the company's board has hired Allen & Company to do a "strategic review to help the Company to a path of robust growth." The letter, first leaked on Friday indicated the company may be considering a review of the company, code word for a sale or merger, which had been reported earlier in the week by Bloomberg News. The stock gained more than 5% after the news broke. The largest U.S. website by viewers is reeling after its board voted to fire former Chief Executive Carol Bartz earlier this September and replace her with CFO Timothy Morse on an interim basis. The Sunnyvale, California based Company has been in talks with AOL Chief Executive Tim Armstrong about a potential merger. A merged Yahoo! and AOL ( AOL) would likely keep Armstrong on as CEO to run the combined company. In the letter co-signed by Yang, Chairman Roy Bostock and co-founder David Filo the managers wrote to employees that, "You should know that the entire Board and management team are fully aligned and unanimous in their views regarding the scope of this work." The statement appears to be a way to show workers that the board is working in unity, a contrast to Hewlett Packard's ( HPQ) board dispute over who and how to run the struggling personal computer maker. The letter stated that "we need to anticipate what
Buyout star Wilbur L. Ross and private equity investor Ronald W. Burkle of the Yucaipa Companies are each investing $50 million in Amalgamated Bank. The New York based bank founded in 1923 by the Amalgamated Clothing Workers of America calls itself "America's Labor Bank" and was the only 100 percent union owned bank prior to the investment according to the its website. Burkle and Ross will each receive a 20% stake in the bank's stock for their $50 million investment and the union will continue to own a remaining 60%. Amalgamated, with $4.5 billion in deposits, was looking to find investors after its capital ratios fell to 6.2% and was ordered by the Federal Deposit Insurance Corp. and New York State Banking Department to raise its tier 1 capital ratio above 7% by August 2012. According to the FDIC, the minimum Tier 1 capital to total asset ratio is 4% and it also adds organizations with weakness and those that are undergoing growth "are expected to maintain capital ratios well above the minimum levels." The bank, which has 27 retail branches with 20 located in the greater New York area, came under pressure in 2006 after between its garment and textile-focused union members opposed a merger with the Hotel Employees and Restaurant Employees International Union. The apparel union, now called Workers United, then joined the Service Employees International Union and kept control of Amalgamated's bank operations, while the hotel worker union took control of its real estate portfolio. The de-merger of unions is still being litigated. All of the players involved in the investment have experience working with companies that have strong union ties. After buying Bethlehem Steel out of bankruptcy for $ 1.5 billion in 2003, Ross worked forcefully to restructure mills and underfunded pension when in integrating the once giant steelmaker into his International Steel Group. Burkle, founder of The Yucapia Companies started in 1986 and which has since done $30 billion of mergers and acquisitions, worked closely with the United Food and Commercial workers union after buying pieces of Ralph's and Pathmark.