February 27, 2021

DealBook: Activist Investor to Step Down From Yahoo Board

Daniel S. Loeb, founder of Third Point, at a conference in Las Vegas last year.Steve Marcus/ReutersDaniel S. Loeb, founder of Third Point, at a conference in Las Vegas last year.

4:50 p.m. | Updated

The activist investor Daniel S. Loeb is parting ways with Yahoo.

Mr. Loeb, whose campaign to change Yahoo culminated in the appointment last year of Marissa Mayer as the company’s chief executive, has submitted his resignation from the board, Yahoo said Monday.

Two other directors originally nominated by Mr. Loeb’s firm, Harry J. Wilson and Michael J. Wolf, are also stepping down. The resignations, effective July 31, will leave Yahoo with a seven-member board, the company said.

In addition, Yahoo has agreed to buy 40 million shares of its stock from Mr. Loeb’s firm, Third Point, at a price of $29.11 a share, the closing price on Friday. That will leave Third Point with about 20 million Yahoo shares, or less than 2 percent of the common stock outstanding.

Third Point, which initially disclosed a 5.15 percent stake in Yahoo in September 2011, more than doubled its investment in less than two years. It initially paid about $509 million for 40 million shares, which it sold on Monday for $1.16 billion.

Shares of Yahoo fell $1.25, or 4.3 percent, to close at $27.86 on Monday.

The hiring of Ms. Mayer from Google last July was considered a coup for Yahoo, an aging technology company in need of a new direction. She has overseen a string of acquisitions since then, including the $1.1 billion deal for Tumblr in May.

“Since our board’s rigorous search led us to hire Marissa Mayer as C.E.O., Yahoo’s stock price has nearly doubled, delivering significant value for shareholders,” Mr. Loeb said in a statement.

Mr. Loeb spearheaded a hard-fought campaign that led to the ouster of the previous chief executive, Scott Thompson, in May 2012.

Yahoo said on Monday that Max Levchin, a co-founder of PayPal, would remain on the board. His appointment in December was supported by both Third Point and the board.

The share repurchase plan announced Monday is part of Yahoo’s previously announced plan to buy back $1.9 billion of stock, the company said.

“Daniel Loeb had the vision to see Yahoo for its immense potential — the potential to return to greatness as a company and the potential to deliver significant shareholder value,” Ms. Mayer said in a statement. “While there’s still a lot of work ahead, they’ve given us a great foundation.”

Article source: http://dealbook.nytimes.com/2013/07/22/activist-investor-to-step-down-from-yahoo-board/?partner=rss&emc=rss

Ford Brings Back Dividend

DETROIT – The Ford Motor Company on Thursday said it would resume paying quarterly dividends to its shareholders for the first time since 2006 as it closes out its third consecutive profitable year.

The company’s directors approved paying out 5 cents a share on March 1. Ford recently signaled that it was close to restoring its dividend, and analysts had been expecting an announcement soon, though some were forecasting a slightly higher amount.

The payouts will total about $200 million, Ford said.

“We have made tremendous progress in reducing debt and generating consistent positive earnings and cash flow,” William Clay Ford Jr., the company’s executive chairman, said in a statement. “The board believes it is important to share the benefits of our improved financial performance with our shareholders.”

Ford is the first of the three Detroit automakers to bring back a dividend and the only one to have avoided filing for bankruptcy during the 2009 recession. After closing numerous plants and cutting thousands of jobs as part of its restructuring, Ford has been focused on strengthening its balance sheet by paying down debt and improving its liquidity.

“The shareholders who have invested in us need to get a return on that investment,” Ford’s chief financial officer, Lewis W.K. Booth, said on a conference call with reporters. “As our business improves and our results improve, we’ll continue to look to see if we can increase the dividend.”

Mr. Booth said Ford expected that it could continue paying a dividend even if the economy worsened in the future. The company has historically cut its dividend during downturns to conserve cash.

Ford suspended its common-stock dividend of 5 cents a share in September 2006, a year after its credit rating fell into junk status. Company officials had said they intended to resume a dividend after regaining an investment-grade rating, but in October, Mr. Booth said the dividend might be restored even before that happens. Ford is currently rated one notch below investment grade.

Several analysts said the four-year labor agreement that Ford signed with the United Automobile Workers in October paved the way for the company to bring back a dividend in the first quarter.

Brian Johnson, an analyst with Barclays Capital, had projected an 8 cent dividend in the first and second quarters, and Adam Jonas of Morgan Stanley estimated that Ford would pay up to $1.2 billion in dividends next year, or an average of about 7.5 cents a quarter.

Article source: http://feeds.nytimes.com/click.phdo?i=950775cff02086aebb9019f677f03c8c

DealBook: Mitsubishi Deal Aids Morgan Stanley’s Recovery

James P. Gorman has struggled to turn around Morgan Stanley since becoming chief executive.Chester Higgins Jr./The New York Times James P. Gorman has struggled to turn around Morgan Stanley since becoming chief executive.

James P. Gorman, the chief executive of Morgan Stanley, received some bad news earlier this year. A joint venture controlled by Mitsubishi UFJ Financial in Japan was facing huge losses, which would drag down earnings at the American investment bank.

But Mr. Gorman used the situation as leverage, striking a deal that frees Morgan Stanley from paying roughly $800 million a year to Mitsubishi, the costly overhang of a cash infusion made during the financial crisis.

Announced on Thursday, the agreement between the two banks removes a major financial burden on Morgan Stanley, which at the same time reported that first-quarter profit declined 48 percent from the period in the previous year. It also was a personal victory for Mr. Gorman, who has struggled to turn around Morgan Stanley since becoming chief executive in January 2010. In an internal note to employees, Mr. Gorman, 52, called the deal a “signature event” for the firm.

Under the terms of the transaction, Mitsubishi will trade most of its convertible preferred stock in Morgan Stanley for common stock. Once completed, Mitsubishi UFJ will own 385 million common shares, or roughly 10 percent of the company. The agreement requires approval from shareholders and regulators.

Although the firm still faces major obstacles in its recovery, investors welcomed the deal. Shares of Morgan Stanley closed at $26.48, up 1.69 percent, on Thursday.

Morgan Stanley reached out to Mitsubishi for a $9 billion lifeline during the depths of the crisis in 2008. In exchange for the money, the investment bank agreed to make quarterly dividend payments of roughly $200 million on Mitsubishi’s stake.

The firm was required to do so until the stock hit $37.875 for 20 out of 30 consecutive trading sessions — or until the two banks reached a new agreement. With the stock languishing below that target, Morgan Stanley insiders worried it could take years to reach that level.

For months, the Mitsubishi stake has been a source of aggravation for Mr. Gorman, who had inherited several headaches, some of which he dealt with by shedding nonessential divisions.

At a staff meeting in January, the chief executive expressed his frustration about the dividend payment. In response to questions about bonuses, he told employees that the firm needed to show restraint on compensation in part to appease shareholders and get the stock price up — generating an automatic end to the Mitsubishi payment.

When the news of the joint venture troubles crossed his desk around the same time, Mr. Gorman moved to use the information to his advantage. Ruth Porat, Morgan Stanley’s chief financial officer, who worked with Mr. Gorman and other senior Morgan executives on the latest deal, said the losses “took a logical discussion to the finish line.”

The parties were also cognizant that Goldman Sachs was moving to pay back a $5 billion crisis investment from Warren E. Buffett’s Berkshire Hathaway, which was completed this week.

In late March, Mr. Gorman flew to Japan to meet with executives of Mitsubishi and they reached an accord not long after. Morgan Stanley’s board voted to approve the pact this week.

The directors also met to review the firm’s first-quarter earnings, which Morgan Stanley released Thursday. Morgan Stanley posted a profit of $736 million, compared with $1.41 billion a year earlier. The results included a pretax loss of $655 million from the Mitsubishi joint venture.

The firm’s quarterly profit of 50 cents a share beat analysts’ expectations of 35 cents, according to Thomson Reuters.

Net revenue was $7.6 billion for the quarter, compared with $9.1 billion a year ago.

Although the Mitsubishi deal removes one obstacle to Morgan Stanley’s prospects, the firm still has plenty of work left on its turnaround, as it contends with a sluggish economic environment and a more restrictive regulatory regime. Its fixed-income and commodities division posted revenue of $1.77 billion, down 35 percent from year-ago levels. Asset management posted net revenue of $626 million, down 4 percent.

There were bright spots in the financials. Investment banking reported first-quarter revenue of $1.2 billion, up 15 percent from the period a year earlier. At the global wealth management division, which includes Morgan Stanley Smith Barney, revenue increased to $3.4 billion, from $3.1 billion a year ago.

Mr. Gorman struck an unusually positive note on the firm’s conference call with analysts, saying the changes he and his team had made over the last year or so were starting to pay off.

“We made clear progress increasing client share and this translated to financial performance. We have seen the benefits of our investments in hiring and the leadership as we execute across our businesses,” he said.

Article source: http://feeds.nytimes.com/click.phdo?i=fd55d841106c2584de0c7067bc4c282a