Yahoo stock up on shareholder pressure; American Land shares soar with bid; XL scouts for offers

By Cristal Cody

New York, Dec. 10 - A Yahoo! Inc. shareholder jumped into the debate Wednesday and added to the sale mantra that has dogged the internet company for a year.

The extra pressure probably won't speed up a sale, but Yahoo is expected to choose a new chief executive by the end of the year, an analyst said Wednesday.

In other deal activity, shares of American Land Lease Inc. jumped a whopping 235.9% to $13.10 on a $14.20-a-share buyout offer within minutes of the market opening Wednesday.

Also on the forefront, a report that XL Capital Ltd. is looking for a buyer sent the stock down 32.64% to close at $3.90 Wednesday.

Meanwhile, the markets made their way up after losing ground a day earlier.

The Dow Jones Industrial Average rose 0.81% to 8,761.42.

The Standard & Poor's 500 index rose 1.19% to 899.24, and the Nasdaq Composite index closed up 1.17% to 1,565.48.

New Yahoo CEO by New Year's

In a letter sent Wednesday to Yahoo's board of directors, Ivory Investment Management LP urged the company to sell its search unit to Microsoft Corp.

Ivory Investment, one of Yahoo's largest shareholders with a 1.5% stake, pictures a deal where Microsoft would acquire Yahoo's search engine and Yahoo would keep 80% of revenue generated by search queries on its own site.

The deal could net Yahoo about $15 billion for the search platform and give shareholders a value of $24 to $29 a share, according to Ivory Investment.

Yahoo shares rose 9.93% to close Wednesday at $13.40, down from a 52-week high of $30.25.

Microsoft chief executive Steve Ballmer has said the company is no longer interested in acquiring all of Yahoo but may be interested in the search engine.

Yahoo already is looking for a new chief executive officer after Jerry Yang said he would resign. Yang had turned down Microsoft's $47.5 billion, or $31-a-share, offer earlier this year for the entire company.

"The agenda for the board is first to bring in a new CEO, hopefully before the end of the year," Ross Sandler, senior internet analyst with RBC Capital Markets, said Wednesday. "That's the goal internally, but there's no magic date out there."

Yahoo representatives were not immediately available for comment.

Sandler said Yahoo's board already is under a tremendous amount of pressure to find a buyer or improve shareholder value.

"They need to do something in the next six months or shareholders will gripe even louder than they have today," he said. "The reaction we're seeing in the stock value today is simply a case of where we're getting closer to the end of the year and Yahoo has promised to have a new CEO in place."

Microsoft's stock closed up 0.05% to $20.61 in trading Wednesday.

American Land soars on bid

American Land Lease shares closed at $12.60 Wednesday, up $8.70, or 223.08%, on the buyout offer valued at about $438 million, including the assumption of debt and preferred stock.

The Clearwater, Fla.-based real estate investment trust said it has approved the $14.20-a-share offer in cash from Green Courte Partners LLC, a Chicago-based private equity investment firm.

In connection with the transaction, limited partners of Asset Investors Operating Partnership LP, American Land's operating partnership, also will receive $14.20 for each of their limited partnership units.

The company's series A cumulative redeemable preferred stock will remain outstanding after the transaction is completed.

American Land directors Terry Considine, Thomas L. Rhodes, Bruce D. Benson and Bruce E. Moore own about 12% of outstanding shares and have committed to tender their shares and partnership units in favor of the deal.

"After a thorough year-long review of strategic alternatives, the board concluded that this transaction was in the best interests of our shareholders, customers and team members," Considine, American Land's chairman and chief executive, said in a statement.

American Land expects the tender offer to start by Dec. 23. The deal is scheduled to close in the first quarter of 2009.

XL buyout rumors

XL Capital is rumored to be looking for a buyer and has retained Goldman Sachs Group Inc. to solicit bids, according to a Bloomberg report that cited unnamed sources.

XL Capital representatives were not immediately available to confirm the report.

The Bermuda-based insurer is reported to be facing growing investment losses and could struggle piquing interest in a sale.

XL Capital lost $1.65 billion, or $6.09 per share, in the third quarter.

Shares have traded from $3.45 to $62.26 over the past year.

Several analysts reached late Wednesday refused to comment.

Mentioned in this article:

American Land Lease Inc. NYSE: ANL

Microsoft Corp. Nasdaq: MSFT

Yahoo! Inc. Nasdaq: YHOO

XL Capital Ltd. NYSE: XL

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