/// Exclusive: FTC Asking Questions About Third Point’s Yahoo Stake

August 3, 2012  |  All Things Digital


An attorney from the Federal Trade Commission has been asking questions regarding Third Point, the New York hedge fund that owns more than six percent of Yahoo and is its largest shareholder, according to sources. Two people I spoke to — both of whom declined to be identified — in Silicon Valley separately said they had been contacted by a lawyer at the FTC’s Bureau of Competition inquiring about the circumstances of their contact with Third Point manager Dan Loeb (pictured here), specifically around the time that he first began buying large chunks of Yahoo last year as part of an activist shareholder action. Loeb is currently a director on the Yahoo board. One of those people contacted was told by the FTC attorney that it was related to a “non-public investigation,” although the lawyer did not reveal specifically what the line of inquiry was about. But another source said that it was related to the Hart-Scott-Rodino Antitrust Improvement Act (HSR Act) and its filing requirements. The antitrust law, designed to prevent anticompetitive mergers or acquisitions, according to the FTC Web site , “requires companies to report any deal that is valued at more than $66 million to the agencies so they can be reviewed.” In addition, according to FTC information, “the HSR Act requires that under some circumstances, individuals who acquire voting securities must notify the FTC and Department of Justice and observe a waiting period before completing the acquisition.” The waiting period is typically 30 days, which can be waived by the FTC. An FTC spokesman declined to comment about any possible inquiries by its staff. Third Point also declined to comment. I reached out to Yahoo spokeswoman, and am also awaiting a comment. But another source said the Yahoo board was aware of the FTC scrutiny and does not consider it a serious issue. To be clear, there has been no action by the FTC against Third Point and many such inquiries never lead to a finding that any violation occurred and are a routine part of the agency’s oversight job. In addition, if a violation did occur, it also might have been technical and inadvertent or due to faulty advice from counsel. That was the case in a $500,000 fine paid to the FTC by Comcast CEO Brian Roberts last December. In addition, the FTC then determined that Roberts also got no financial gains from the filing violation and also reported the problem soon after it was discovered. Previous to that, the FTC has settled with a variety of investors , including hedge funds, over violations of HSR filing requirements. Neither Third Point nor Loeb has ever been subject to such any such action by the FTC. He is experienced investor who is well known for his “poison pen” and pugnacious manner. “The hedge-fund manager competes in triathlons, never, ever drinks from a plastic water bottle and is unsparing at times in his criticism of corporate executives,” a recent article in The Wall Street Journal noted. Loeb definitely took clear and unflinching aim at Yahoo last September with his $8.7 billion fund, disclosing that he had acquired a more than five percent stake in Yahoo, proceeding to wage a proxy fight to gain board seats. At the time, he paid about $11 per Yahoo share

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Exclusive: FTC Asking Questions About Third Point’s Yahoo Stake



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