Yahoo investors rankle at spin-off plan, one suggests laying off 9000

The company’s board decided last week to nix the spinoff of its stake in Alibaba and instead attempt a complicated “reverse” spinoff of its core business and its stake in Yahoo Japan.

SpringOwl Asset Management also expressed frustration with Yahoo’s management and strategy in a 99-page presentation that calls for Mayer’s ouster and suggests cutting 9,000 jobs and eliminating free food. Mayer has sold roughly $26 million worth of Yahoo stock options since 2014 and Jackson estimates she’ll make $365 million for five years of work at Yahoo if she manages to stick around another year and a half.

The wide variance between the proposals put forth by Canyon Capital, SpringOwl and Starboard Value LP, the activist investor who has pressured Yahoo over the past year, highlights the different directions the Internet business could go if it chooses to abandon Ms. Mayer’s turnaround.

Yahoo’s management said it plans to increase the value of its core business through the spin-off from Alibaba, a process that could take more than a year. Mayer said she would announce a more detailed organisation plan during the fourth quarter earnings call in January. SpringOwl didn’t comment beyond providing a copy of the presentation, which was previously reported by the Wall Street Journal.

A hedge fund investor in Yahoo wants boss Marissa Mayer fired and 9,000 of the firm’s 12,000 staff laid off.

Investors’ patience with Yahoo has begun to wane after years of steady decline in business, with activist shareholder Starboard Value last month calling for the company to sell its Web businesses, or face a proxy fight. SpringOwl is only a $300 million fund. But his plan is to round up major shareholders to rally around his plan.

Yahoo scrapped the spinoff of its Alibaba holdings, after the company failed to get prior approval from the U.S. Internal Revenue Service on the transaction’s tax-free status.

In its December 11 letter to Yahoo’s board, Canyon Capital indicated that Mayer already has been given too much time to turn things around.

“Requiring shareholders to continue to wait for definitive action for another year or more-and extending the tenure of senior management-while the company evaluates this reverse-spin is simply unacceptable”, the investor wrote in its letter.

Yahoo Inc. didn’t immediately respond to requests for comment about the critiques from SpringOwl and Canyon Capital.

The size of Starboard’s stake in Yahoo isn’t clear but it is among the firm’s largest positions, people familiar with the matter have said.

Canyon Capital wasn’t the only investor with something to say about the current state of Yahoo. Last week, Yahoo Chairman Maynard Webb said the company’s board “has complete confidence in the management team and the leadership” of the company.