Investment group settles US complaint in Yahoo takeover attempt

Third Point talked about hiring a CEO and replacing the board after acquiring Yahoo stock

An investment advisor and two sister investment funds violated U.S. law when they failed to disclose their takeover dreams when acquiring more than US$66 million worth of Yahoo stock in 2011, the Federal Trade Commission has charged.

Investment advisor Third Point Partners and funds Third Point Ultra and Third Point Offshore Fund violated U.S. premerger reporting laws during their purchase of Yahoo stock, the FTC said Monday.

The three related companies, which have agreed to settle the FTC charges, reported the stock purchases were made solely for investment purposes, but the companies contacted people about becoming CEO or board members of Yahoo and took steps to field an alternate slate of directors for Yahoo's board, the U.S. Department of Justice said in a complaint filed on behalf of the FTC.

Third Point Partners didn't immediately respond to a request for comment on the settlement.

The stock purchases by the Third Point companies happened about a year before Marissa Mayer was named CEO of Yahoo in July 2012.

The FTC charged the companies with failing to observe the filing and waiting requirements of the Hart-Scott-Rodino (HSR) Act before purchasing shares in Yahoo.

The HSR Act requires that companies and individuals notify the FTC and the DOJ of most large transactions that affect U.S. commerce. The purchasers are required to observe a waiting period before closing their transactions, while one of the agencies determines whether the transactions could hurt competition. The law exempts reporting requirements on purchases of up to 10 percent of a company's stock if they are made solely for investment purposes.

The investment exemption is a narrow one "limited to those situations in which the investor has no intention to influence the management of the target firm," FTC Bureau of Competition Director Deborah Feinstein said in a statement. "Here, Third Point's conduct demonstrated that it intended to have more than a passive interest in Yahoo."

Under the proposed settlement, the companies are prohibited from relying on the investment-only exemption if they have contacted third parties to gauge their interest in joining the board of the target company, communicated with the target company about proposed candidates for its board, or taken other active roles in the target company.  The FTC and DOJ decided not to seek civil penalties in the case, saying the violation was inadvertent and short-lived.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

By Grant Gross

IDG News Service
Show Comments

Most Popular Reviews

Latest News Articles


GGG Evaluation Team

Kathy Cassidy


First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni


For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell


The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi


The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott


My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?