By Douglas MacMillan
Yahoo Inc. on Thursday announced a plan to buy back $2 billion
of its own shares with proceeds from the recent public offering of
Alibaba Group Holding Ltd.
The buybacks are part of Chief Executive Marissa Mayer's broader
effort to unlock value from Yahoo's Asian assets and return cash to
shareholders. The company has repurchased $9.7 billion in stock
since 2013 and earlier this year unveiled a plan to spin off its
remaining stake in Alibaba.
The new plan expires March 31, 2018. Yahoo said about $726
million remains available under a repurchase program announced in
November 2013.
The additional buybacks bolster Ms. Mayer's defense against
activist investor Starboard Value LP, who took a position in Yahoo
last year and argued the CEO has diminished investor value by
overspending on acquisitions. The investor reiterated some of its
concerns in a letter to Ms. Mayer earlier this month, urging the
company to cut costs, spin off its stake in Yahoo Japan and buy
back up to $4 billion in shares.
Friday is the deadline for shareholders to submit nominees for
the board of Yahoo, effectively the last day that a proxy fight can
be launched.
A spokesman for Starboard wasn't immediately able to comment
Thursday. The firm's latest letter didn't indicate whether the
activist may seek a leadership change, a threat it had made before
the Alibaba spinoff announcement.
Starboard has voiced the loudest objection to Ms. Mayer in the
more than two years since she took the reins at Yahoo. During that
period, the Internet portal has failed to boost its core
advertising business and struggled to reinvent itself in an age of
social networks and mobile computing.
Yahoo reaped more than $5 billion from Alibaba's record-setting
IPO last fall, in addition to its sale of $7.6 billion in shares of
the Chinese e-commerce giant in 2012.
Yahoo had about $8 billion in cash and short-term securities as
of Dec. 31.
Buybacks diminish the amount Ms. Mayer could spend on large
acquisitions. Last year, she spent more than $800 million to
acquire two companies: mobile ad analytics company Flurry and
video-ad service BrightRoll.
In after-hours trading Thursday, Yahoo's shares rose 2.2% to
$45.45.
David Benoit contributed to this article.
Write to Douglas MacMillan at douglas.macmillan@wsj.com
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