Yahoo has reached a truce with an activist investor threatening to oust CEO Marissa Mayer and the rest of its board, removing a major distraction as the company evaluates bids to buy its internet operations.
The agreement will give the rebellious shareholder, Starboard Value, four seats on Yahoo's board. The company is diluting Starboard's voting power, though, by expanding its board from nine to 13 directors for the next two months.
The board will be pared to 11 directors within two months under the agreement. Yahoo will pay Starboard up to $US2 million ($A2.64 million) as a reimbursement for legal fees and other expenses the New York hedge fund incurred while preparing its attempt to overthrow Yahoo's board.
Although Starboard won't be able to exert control over the process, it will have a seat at the negotiating table as Yahoo talks to suitors interested in snapping up its email, advertising tools and other digital services, including widely read sports and finance sections.
A decision on whether Yahoo will sell or retain its internet operations is expected to be reached before the company's annual meeting, which will be held by June 30, according to a Wednesday regulatory filing.
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