Yahoo faces investor mutiny as Asia talks unravel

SAN FRANCISCO (AP) — Yahoo’s hopes for a fresh start under a new CEO faded Tuesday as its closely watched discussions to sell most of its Asian holdings unraveled and a frustrated shareholder announced that he will try to seize four seats on the struggling Internet company’s board.

The developments, which unfolded within a few hours of each other, mean Yahoo’s recently hired CEO Scott Thompson will have to deal with more uncertainty and potential upheaval than he probably would have liked as he tries to end a strategic and financial malaise that has depressed the company’s stock price for years.

“The honeymoon is already over,” said BGC Financial analyst Colin Gillis. “Yahoo is probably looking at another year of turmoil.”

Yahoo Inc. has been trying to appease shareholders by entering negotiations to sell two of its most valuable assets — its stakes in China’s Alibaba Group and Yahoo Japan — in a complicated deal that could have generated billions of dollars for dividends and possible acquisitions. The company, based in Sunnyvale, California, had sought to avoid a confrontation with one of its largest shareholders, New York hedge fund manager Daniel Loeb, by purging its board of four longtime directors, including chairman Roy Bostock.

Both those efforts foundered Tuesday.

The negotiations to sell Yahoo’s stakes in Alibaba and Yahoo Japan ruptured abruptly over price and the best way to complete the complex deal, according to a person familiar with the matter. Another person familiar with the matter said Yahoo had second thoughts about selling after agreeing to the sales price in a 300-page proposal outlining the proposed deal in late December. Both people spoke to The Associated Press on Tuesday on the condition of anonymity because the negotiations are considered confidential, despite repeated leaks during the past few months.

All Things D, a technology blog affiliated with The Wall Street Journal, reported earlier that the talks had collapsed.