Activist investor Starboard Value LP said it is concerned about
media reports that have said Yahoo Inc. may be interested "in doing
large-scale acquisitions."
In addition, the firm pressed the Internet giant for its plans
regarding its shares of Alibaba Holdings Inc.
Reports have indicated that Yahoo is thinking about trying to
acquire Scripps Networks Interactive or Time Warner Inc.'s CNN.
"Our concerns that these media reports may have some truth are
exacerbated as it has now been more than 60 days since the IPO of
Alibaba, and Yahoo is now free to disclose its intentions with
regard to its shares of Alibaba," Starboard founder Jeffrey C.
Smith wrote in a letter to Yahoo Chief Executive Marissa Mayer.
A Yahoo spokesperson wasn't immediately available for comment.
Shares of Yahoo, up 21% over the past year, rose 2% in morning
trading.
Mr. Smith also noted that Yahoo has yet to disclose its plans
for "a tax-efficient separation of its noncore minority equity
interests," such as the company's remaining holdings in Alibaba and
Yahoo Japan.
Starboard aired concerns about recent speculation that Yahoo,
which reaped more than $5 billion by selling part of its holdings
in Alibaba, is considering a cash-rich split-off to separate these
interests. Mr. Smith said the option is clearly inferior to a
spinoff or other ways to unlock the value of Yahoo's stakes.
"Should you instead choose to proceed down a different path by
pursuing large acquisitions and/or a cash-rich split, both of which
have been speculated, such actions would be a clear indication to
us that significant leadership change is required at Yahoo," Mr.
Smith wrote.
Starboard again urged Yahoo to consider a merger with AOL Inc.
In November, the firm revealed that it had a 2.4% stake in AOL and
a 0.8% stake in Yahoo.
Write to Michael Calia at michael.calia@wsj.com
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