Yahoo! Inc. (NASDAQ:YHOO) Files An 8-K Entry into a Material Definitive Agreement
Item1.01
| Entry into a Material Definitive Agreement. |
As previously disclosed in Yahoo! Inc.s (Yahoo or the Company)
Current Report on Form 8-K filed with the U.S. Securities and
Exchange Commission (the SEC) on July25, 2016, Yahoo and Verizon
Communications Inc. (Verizon) entered into a Stock Purchase
Agreement (the Original Stock Purchase Agreement) on July23,
2016, to which Yahoo has agreed to sell, and Verizon has agreed
to purchase (the Sale), all of the outstanding shares of Yahoo
Holdings, Inc., a wholly-owned subsidiary of Yahoo (Yahoo
Holdings) (and prior to the Sale to cause Yahoo Holdings to sell
to a foreign subsidiary of Verizon all of the equity interests in
a foreign subsidiary of Yahoo Holdings that will hold certain
foreign subsidiaries relating to the Operating Business (as
defined below) of Yahoo), which, immediately prior to the
completion of the Sale, will own the Operating Business. Also as
previously announced, concurrently with the execution of the
Original Stock Purchase Agreement, Yahoo and Yahoo Holdings
entered into a Reorganization Agreement (the Original
Reorganization Agreement), to which Yahoo will transfer to Yahoo
Holdings prior to the consummation of the Sale all of its assets
and liabilities relating to the operating business of Yahoo (the
Operating Business), other than specific excluded assets and
retained liabilities.
On February20, 2017, Yahoo and Verizon entered into an Amendment
to Stock Purchase Agreement amending the Original Stock Purchase
Agreement (the SPA Amendment and, together with the Original
Stock Purchase Agreement, the Amended Stock Purchase Agreement),
and, concurrently with the execution of the SPA Amendment, Yahoo
and Yahoo Holdings entered into an Amendment to Reorganization
Agreement amending the Original Reorganization Agreement (the RA
Amendment and, together with the Original Reorganization
Agreement, the Amended Reorganization Agreement). Additionally,
concurrently with the execution of the SPA Amendment and the RA
Amendment, Yahoo, Yahoo Holdings and Verizon entered into a
Settlement and Release Agreement (the Settlement and Release
Agreement and, together with the SPA Amendment and the RA
Amendment, the Amendment Documents, and the transactions
contemplated by the Amended Stock Purchase Agreement, the Amended
Reorganization Agreement, and the Settlement and Release
Agreement, the Revised Transactions).
to the terms of the SPA Amendment, among other things, (a)the
consideration to be paid by Verizon to Yahoo in connection with
the Sale is reduced by $350,000,000 to $4,475,800,000 in cash,
subject to certain adjustments as provided in the Amended Stock
Purchase Agreement; (b)the termination fee to be paid by Yahoo to
Verizon in certain circumstances is reduced to $134,274,000; (c)
the date after which each of Yahoo and Verizon may terminate the
Amended Stock Purchase Agreement if the Closing (as defined in
the Amended Stock Purchase Agreement) has not occurred has been
extended to July24, 2017; and (d)certain data security incidents
to which Yahoo has been subject will be disregarded, subject to
certain exceptions, for purposes of determining whether the
conditions to Closing relating to breaches by the Company of its
representations, warranties, and covenants in the Amended Stock
Purchase Agreement have been satisfied and whether a Business
Material Adverse Effect under the Amended Stock Purchase
Agreement has occurred.
to the terms of the RA Amendment, among other things, (a)upon and
after the Closing, the Company will retain certain post-closing
cash liabilities arising out of governmental or third party
investigations, litigations or other claims related to certain
data security incidents and other data breaches incurred by the
Company that were to be assumed by Yahoo Holdings under the
Original Reorganization Agreement; (b)Verizon will indemnify the
Company for 50percent (with the Company being responsible for the
remaining 50 percent) of any such liabilities that have not been
finally determined and entered or stipulated against the Company
prior to the Closing; and (c)the Company will be responsible for
100percent of any such liabilities that are finally determined
and entered or stipulated against the Company or its subsidiaries
prior to the Closing.
to the terms of the Settlement and Release Agreement, among other
things, Verizon released certain claims, subject to certain
exceptions, it (and its affiliates and representatives) may have
against the Company (or its affiliates and representatives)
relating to certain data security incidents and other data
breaches incurred by the Company.
Additional Information
Other than as expressly modified to the Amendment Documents, the
Original Stock Purchase Agreement and the Original Reorganization
Agreement, which were previously filed as Exhibit 2.1 and Exhibit
2.2, respectively, to Yahoos Current Report on Form 8-K filed
with the SEC on July25, 2016, remain in full force and effect.
The Amendment Documents are attached as Exhibits to this Current
Report on Form 8-K
to provide stockholders with information regarding their
terms.They are not intended to provide any other factual
information about Yahoo. The Amendment Documents contain
representations and warranties by each of the parties to the
applicable Amendment Documents. These representations and
warranties were made solely for the benefit of the other parties
to each such Amendment Document and (i)are not intended to be
treated as categorical statements of fact, but rather as a way of
allocating risk to one of the parties if those statements prove
to be inaccurate, (ii)may have been qualified in the Amendment
Documents by confidential disclosure schedules that were
delivered to the other parties thereto in connection with the
signing of the Amendment Documents, which disclosure schedules
contain information that modifies, qualifies, and creates
exceptions to the representations, warranties, and covenants set
forth in the Amendment Documents, (iii)may be subject to
standards of materiality applicable to the parties that differ
from what might be viewed as material to stockholders, and
(iv)were made only as of the date of the applicable agreement or
such other date or dates as may be specified in such Amendment
Document. Moreover, information concerning the subject matter of
the representations, warranties, and covenants may change after
the date of the Amendment Documents, which subsequent information
may or may not be fully reflected in public disclosures by Yahoo
or Verizon. Accordingly, you should not rely on the
representations, warranties, and covenants or any descriptions
thereof as characterizations of the actual state of facts or
condition of Yahoo or Verizon.
The foregoing
summaries of the SPA Amendment, the RA Amendment, and the
Settlement and Release Agreement do not purport to be complete
and are subject to, and qualified in their entirety by, the full
text of the SPA Amendment, the RA Amendment, and the Settlement
and Release Agreement, respectively, copies of which are attached
to this Current Report on Form 8-K as Exhibit2.1, Exhibit 2.2,
and Exhibit 10.1, respectively, and are incorporated herein by
reference.
| Item8.01 | Other Events. |
On February21,
2017, Yahoo and Verizon issued a joint press release announcing
the execution of the Amendment Documents. The press release is
attached as Exhibit 99.1 to this Current Report on Form 8-K and
is incorporated herein by reference.
| Item9.01 | Financial Statements and Exhibits. |
(d)
Exhibits.
|
Exhibit Number |
Description |
|
|
2.1 |
Amendment to Stock Purchase Agreement, dated February20, 2017, by and between Yahoo! Inc. and Verizon Communications Inc. |
|
|
2.2 |
Amendment to Reorganization Agreement, dated February20, 2017, by and between Yahoo! Inc. and Yahoo Holdings, Inc. |
|
|
10.1 |
Settlement and Release Agreement, dated February20, 2017, by and among Yahoo! Inc., Yahoo Holdings, Inc., and Verizon Communications Inc. |
|
|
99.1 |
Joint Press Release of Yahoo! Inc. and Verizon Communications Inc., issued on February21, 2017 |
Forward-Looking
Statements.
This communication
contains forward-looking statements concerning the proposed sale
of the Operating Business. 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 Revised Transactions 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 Revised Transactions; (ii)the existence or
occurrence of any event, change, or other circumstance that could
give rise to the termination of the Amended 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 Amended 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 Revised Transactions 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 Revised Transactions; (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 Amended
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 Revised Transactions or the termination of
the Amended Stock Purchase Agreement; (ix)potential adverse
effects on Yahoos business, properties, or operations caused by
Yahoo implementing the Revised Transactions or foregoing
opportunities that Yahoo might otherwise pursue absent the
pending Revised Transactions; (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 Revised Transactions; 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 Revised Transactions.
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 December31, 2015, as amended, and Quarterly
Report on Form 10-Q for the quarter ended September30, 2016,
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 February21, 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.
On September9,
2016, Yahoo filed with the SEC a preliminary proxy statement
regarding the proposed sale of Yahoos operating business to
Verizon. Yahoo will file with the SEC a definitive version of the
proxy statement, which will be sent or provided to Yahoo
stockholders when available. The information contained in the
preliminary proxy statement is not complete and may be changed.
BEFORE MAKING
ANY VOTING
DECISION, YAHOOS
STOCKHOLDERS ARE
STRONGLY ADVISED
TO READ YAHOOS
PRELIMINARY PROXY
STATEMENT IN
ITS ENTIRETY
(INCLUDING ANY
AMENDMENTS OR
SUPPLEMENTS THERETO)
AND, WHEN IT
BECOMES AVAILABLE,
YAHOOS DEFINITIVE
PROXY STATEMENT
IN ITS
ENTIRETY (INCLUDING
ANY AMENDMENTS
OR SUPPLEMENTS
THERETO) AND
ANY OTHER
DOCUMENTS FILED
WITH THE SEC
IN CONNECTION
WITH THE
REVISED TRANSACTIONS
OR INCORPORATED
BY REFERENCE
THEREIN BECAUSE
THEY WILL
CONTAIN IMPORTANT
INFORMATION ABOUT
THE REVISED
TRANSACTIONS.Investors and stockholders may
obtain a free copy of Yahoos preliminary proxy statement and any
amendments or supplements to the preliminary proxy statement,
Yahoos definitive proxy statement (when available) and any
amendments or supplements to the definitive proxy statement (when
available), and other documents filed by Yahoo with the SEC (when
available) in connection with the Revised Transactions for no
charge at the SECs website at www.sec.gov, on the
Investor Relations page of Yahoos website
investor.yahoo.net, or by writing to Investor Relations,
Yahoo! Inc., 701 First Avenue, Sunnyvale, CA 94089.
Yahoo and its
directors and executive officers, as well as Verizon and its
directors and executive officers, may be deemed participants in
the solicitation of proxies from Yahoos investors and
stockholders in connection with the Revised Transactions.
Information concerning the ownership of Yahoo securities by
Yahoos directors and executive officers is included in their SEC
filings on Forms3, 4 and 5, and additional information is also
available in Yahoos annual report on Form 10-K for the year ended
December31, 2015, as amended, and Yahoos proxy statement for its
2016 annual meeting of stockholders filed with the SEC on May23,
2016. Information about Verizons directors and executive officers
is set forth in Verizons annual report on Form 10-K for the year
ended December31, 2015 and Verizons proxy statement for its 2016
annual meeting of stockholders filed with the SEC on March21,
2016. Information regarding Yahoos directors, executive officers,
and other persons who may, under the rules of the SEC, be
considered participants in the solicitation of proxies in
connection with the Revised Transactions, including their
respective interests by security holdings or otherwise, also is
set forth in the preliminary proxy statement described above and
will be set forth in the definitive proxy statement relating to
the Revised Transactions when it is filed with the SEC. These
documents may be obtained free of charge from the sources
indicated above.
About Yahoo! Inc. (NASDAQ:YHOO)
Yahoo! Inc. (Yahoo), along with its subsidiaries, is engaged in digital information discovery. The Company’s segments include the Americas; Europe, Middle East and Africa (EMEA), and Asia Pacific. The Company focuses on informing, connecting and entertaining its users with its search (Yahoo search), communications, including Yahoo Mail and Yahoo Messenger, and digital content products, including Tumblr, and its four verticals, such as Yahoo News, Yahoo Sports, Yahoo Finance and Yahoo Lifestyle. Yahoo Search is a search engine that serves as a guide for users to discover the information on the Internet. Yahoo Mail connects users to the people and things across mobile and desktop. Yahoo Messenger is an instant messaging service that provides an interactive and personalized way for users to connect and communicate in real-time. The Company’s Digital Content offerings include Tumblr, its social platform, and its four verticals, including News, Sports, Finance and Lifestyle. Yahoo! Inc. (NASDAQ:YHOO) Recent Trading Information
Yahoo! Inc. (NASDAQ:YHOO) closed its last trading session up +0.38 at 45.47 with 9,417,191 shares trading hands.