ALTABA INC. DEFA14A 2017
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. __)
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SUPPLEMENT TO PROXY STATEMENT
Yahoo! Inc. (Yahoo or the Company) is making certain supplemental disclosures to its proxy statement dated April 24, 2017 (as previously supplemented, the Proxy Statement) relating to the pending sale by Yahoo of its operating business to Verizon Communications Inc. (the Sale Transaction) and related proposals, which was filed with the Securities and Exchange Commission (the SEC) on April 24, 2017 and which was supplemented on May 25, 2017. Capitalized terms used herein but not otherwise defined herein have the meanings ascribed to them in the Proxy Statement.
As disclosed in the Proxy Statement, on March 7, 2017, a stockholder derivative and class action captioned Spain v. Marissa Mayer, et al., was filed in the Superior Court of California for the County of Santa Clara. The complaint asserts claims for breach of fiduciary duty, purportedly on behalf of Yahoo, against certain of Yahoos current and former directors and officers. The complaint alleges that defendants failed to prevent and disclose the Security Incidents discussed under Security Incidents Contingencies in Annex 2 of the Proxy Statement and caused or allowed Yahoo to issue materially false and misleading statements in its public filings and other public statements. The complaint also asserts claims of insider trading, purportedly on behalf of Yahoo, against certain defendants under California Corporations Code sections 25402 and 25403. The complaint also asserts direct claims, purportedly on behalf of all current Yahoo stockholders, against individual defendants for breach of fiduciary duty relating to the disclosures in the Proxy Statement concerning the negotiation and approval of the Stock Purchase Agreement and against Verizon for aiding and abetting those individual defendants alleged breach of fiduciary duty. The complaint seeks class certification, unspecified damages, to enjoin defendants from consummating the transactions contemplated by the Stock Purchase Agreement, an award of attorneys fees and costs, and other related injunctive and equitable forms of relief.
Pursuant to an order of the Superior Court of California for the County of Santa Clara, Yahoo has been required to make certain supplemental disclosures related to the Sale Transaction, which are set forth below.
The Proxy Statement is amended and supplemented by, and should be read in conjunction with, the supplemental disclosures set forth below. Stockholders are encouraged to read carefully the supplemental disclosures set forth below, the Proxy Statement, the annexes and exhibits to the Proxy Statement, and the documents incorporated by reference into the Proxy Statement.
The following paragraph is inserted following the last bullet point under the caption Purchase Price on page 68 of the Proxy Statement:
Assuming that the Closing occurred on June 6, 2017, the Company estimates that the adjustment to the purchase price pursuant to the immediately preceding bullet point (the Equity Award Adjustment Amount) would result in an increase to the purchase price that Verizon will pay or caused to be paid in connection with the Sale Transaction of approximately $21 million. The final calculation of the Equity Award Adjustment Amount will be made on the date of the actual Closing and could be higher or lower than this estimate due to changes in the number of unvested Yahoo RSU awards outstanding prior to the Closing as a result of additional vesting of RSUs, forfeiture of RSUs upon employees termination of employment and/or changes in Yahoos stock price prior to the Closing. The foregoing is an estimate of the Equity Award Adjustment Amount only and is not an estimate of the aggregate amount of all of the adjustments to the purchase price described in the bullet points above.
This communication contains forward-looking statements concerning the Sale Transaction. Risks and uncertainties may cause actual results to differ materially from the results predicted. Potential risks and uncertainties include, among others: (i) the inability to consummate the Sale Transaction in a timely manner or at all, due to the inability to obtain or delays in obtaining approval of Yahoos stockholders, the necessary regulatory approvals, or satisfaction of other conditions to the closing of the Sale Transaction; (ii) the existence or occurrence of any event, change, or other circumstance that could give rise to the termination of the Stock Purchase Agreement, which, in addition to other adverse consequences, could result in the Company incurring substantial fees, including, in certain circumstances, the payment of a termination fee to Verizon under the Stock Purchase Agreement; (iii) potential adverse effects on Yahoos relationships with its existing and potential advertisers, suppliers, customers, vendors, distributors, landlords, licensors, licensees, joint venture partners and other business partners; (iv) the implementation of the Sale Transaction will require significant time, attention and resources of Yahoos senior management and others within Yahoo, potentially diverting their attention from the conduct of Yahoos business; (v) risks related to Yahoos ability to retain or recruit key talent; (vi) costs, fees, expenses and charges related to or triggered by the Sale Transaction; (vii) the net proceeds that the Company will receive from Verizon is subject to uncertainties as a result of the purchase price adjustments in the Stock Purchase Agreement; (viii) restrictions on the conduct of Yahoos business, including the ability to make certain acquisitions and divestitures, enter into certain contracts, and incur certain indebtedness and expenditures until the earlier of the completion of the Sale Transaction or the termination of the Stock Purchase Agreement; (ix) potential adverse effects on Yahoos business, properties, or operations caused by Yahoo implementing the Sale Transaction or foregoing opportunities that Yahoo might otherwise pursue absent the pending Sale Transaction; (x) the initiation or outcome of any legal proceedings or regulatory proceedings that may be instituted against Yahoo and its directors and/or officers relating to the Sale Transaction; and (xi) following the Closing, the Company will be required to register and be regulated as an investment company under the Investment Company Act of 1940, which will result in, among other things, the Company having to comply with the regulations thereunder, certain stockholders potentially being prohibited from holding or acquiring shares of the Company, and the Company likely being removed from the Standard and Poors 500 Index and other indices which could have an adverse impact on the Companys share price following the Sale Transaction.
All of these risks and uncertainties could potentially have an adverse impact on Yahoos business and financial performance, and could cause its stock price to decline.
More information about other potential factors that could affect Yahoos business and financial results is included under the captions Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations in Yahoos Annual Report on Form 10-K for the year ended December 31, 2016, as amended, and Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, which are on file with the SEC and available on the SECs website at www.sec.gov. All information set forth in this communication is as of June 6, 2017. Yahoo does not intend, and undertakes no duty, to update this information to reflect subsequent events or circumstances.
Important Additional Information and Where to Find It.
Stockholders will be able to obtain copies of this Schedule 14A, the Proxy Statement, any amendments or additional supplements to the Proxy Statement, and other documents filed by Yahoo with the SEC in connection with its special meeting of stockholders in connection with the Sale Transaction, for no charge at the SECs website at www.sec.gov. Copies of the proxy materials may also be requested from Yahoos proxy solicitor, Innisfree, by telephone at (877) 456-3402 (toll-free) or by email at firstname.lastname@example.org. Additional information can also be found on our investor relations website at investor.yahoo.net.