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Tag: AOL Shareholders

  • AOL Wins Proxy Battle With Starboard: All Board Members Have Been Re-Elected

    AOL released a statement today explaining their proxy battle with activist shareholder, Starboard has come to an end.

    Today, all of their board members have been re-elected for another term signifying that indeed, none of Starboard’s nominations were welcome additions to the AOL team.

    Business Insider published a formal statement from the company:

    “On behalf of AOL’s Board and management team, we want to thank our stockholders for their strong support throughout this process. Over the past few months, we have met with many of our stockholders and greatly appreciate their feedback as well as their commitment to AOL. We intend to be responsive to the messages we heard from our investors and will continue our plans to pursue adding two new independent directors to the Board, who we believe will add additional expertise and relevant perspectives to further enhance the strength of our Board. Today’s outcome reaffirms our strong belief that AOL has the right strategy and team to successfully execute on our plan to continue to deliver enhanced value for all stockholders.”

    You might recall that Starboard issued several activist letters stating that they didn’t appreciate AOL’s efforts to unlock shareholder value and also requested they be allowed to nominate some more appropriate members to the AOL board of directors.

    Of course, this didn’t sit well with many of the AOL shareholders or CEO Tim Armstrong, who blatantly spoke out against Starboard informing them their nominees were unqualified and unwelcome. The recent re-election of AOL’s current board is a strong testament to Armstrong’s sentiments and a gesture of allegiance by the majority of AOL shareholders.

    A recent deal with Microsoft brought over a billion dollars for AOL and now that Starboard is off their back, they plan to divide those funds up amongst shareholders in the most tax efficient way.

    Armstrong claims that brands are going to play an integral part in refining and growing the company in the future, and he hopes to bring them back to profitability by 2013. He also has a goal of connecting brand advertising directly to local advertising. In any event, the future looks a lot brighter for AOL than it did three years ago.

  • AOL Power Struggle Stalls Microsoft Patent Deal

    Last week one of AOL’s biggest shareholders, Starboard Value LP, sent a letter to the AOL board of directors calling of a change of direction in the way the company has been operating and making use of its assets. In their letter they call action to help unlock the true value of AOL’s patent portfolio and licensing agreements from those intellectual properties. Of the recent deal with Microsoft, Starboard offers this commentary from the letter:

    “Although management stated its intention to ‘return a significant portion of the proceeds to shareholders,’ we do not understand why the Company would only return a ‘significant portion’. Why wouldn’t the Company simply return all of the proceeds? We remain concerned that shareholder capital will continue to be used for poorly conceived acquisitions and investments into money-losing initiatives like Patch and other Display properties.”

    Starboard says they want to help AOL, but they insist the current structure and day to day operations are not taking full advantage of the assets available to them to increase the value for their stockholders. Here’s what they claim their plan of action will be:

    “As such, we intend to promptly file preliminary proxy materials with the Securities and Exchange Commission for the election of directors to the AOL Board at the upcoming 2012 Annual Meeting. We remain willing to engage in a constructive dialogue regarding the qualifications of our nominees and a mutually agreeable resolution on board composition. We believe this would be in the best interests of all shareholders.”

    Some other shareholders at AOL haven’t taken a liking to this rigid and hostile stance at Starboard and are coming out to support the administration’s current path exclaiming, “Starboard is proving to be a real distraction and they are potentially destroying value to some degree”.

    Supposedly this uprising from Starboard puts the billion dollar patent deal on the back burner for AOL who had hoped to have it completed by the end of 2012. There is no word on what action AOL will take to defend agaist these advances from Starboard of if they are working to resolve the differences mutually.