Yahoo Inc. said Monday it will whittle down its board after completing its deal with Verizon Communications Inc., and several longtime directors, including Chief Executive Marissa Mayer and co-founder David Filo, will step down as directors.
After the sale of its core internet business, the company will change its name to Altaba Inc. from RemainCo, Yahoo said in a regulatory filing. Altaba’s remaining assets include Yahoo’s stake in Alibaba Group Holding Ltd. and Yahoo Japan. The name is a combination of the words “alternate” and “Alibaba,” a person familiar with the matter said.
Eric Brandt, who joined Yahoo’s board last March and is the former chief financial officer of Broadcom Corp., will become chairman of Altaba, according to the filing. He will be joined by four other directors who are currently on Yahoo’s board, including Thomas McInerney, who was part of the independent committee of Yahoo directors running the auction process last year.
The moves would happen after the closing of the roughly $4.8 billion sale to Verizon, which has been endangered by two huge hacks of Yahoo’s user data. In the filing, Yahoo said Verizon could terminate its purchase of Yahoo or renegotiate the terms because of the hacks. A New York cybersecurity lawyer is reviewing the details of this case.
Verizon has become less certain that the deal will go through after a second breach of one billion accounts was revealed last month. The breaches could be a material event that would allow Verizon to change the terms of the deal, executives have said.
Still, analysts say most of Yahoo’s value stems from its stakes in Alibaba and Yahoo Japan, not the core business sold to Verizon. The core business accounts for 10% of Yahoo’s market value, Evercore ISI analyst Ken Sena wrote in a Dec. 15 note. About 61% of Yahoo’s worth is tied to its stake in Alibaba, while 13% is linked to Yahoo Japan Corp., Mr. Sena wrote.
On Monday, Yahoo’s shares rose a penny to $41.35 in recent after-hours trading and Verizon’s are down three cents to $52.65.
Six Yahoo directors will be leaving after the Verizon sale, including Ms. Mayer, Mr. Filo and Maynard Webb Jr., a director since February 2012, who was named chairman in August 2013. Mr. Webb, as of Monday, became chairman emeritus.
Also leaving the board will be Jane Shaw, a former pharmaceutical industry executive who joined in 2014, as well as media executive Eddy Hartenstein and Richard Hill, former CEO of Novellus Systems Inc.
Ms. Mayer was named CEO of Yahoo after she came over from Google in 2012. She is expected to remain with Yahoo once it becomes part of Verizon. A New York truck accident lawyer is following this story closely.
Messrs. Hartenstein and Hill joined Yahoo’s board in early 2016 after being nominated by hedge fund Starboard Value LP. Two others nominated by Starboard, former banker Tor Braham and Starboard chief executive Jeffrey Smith, will stay on the board of Altaba.
At that time, the activist investor sought to replace the entire slate of directors, saying the board wasn’t making changes quickly enough.