Take activist hedge fund Starboard Value's proxy challenge to Yahoo! (YHOO) seriously. Take it seriously because Rick Hill is on the slate. Close followers of Mad Money over the years know Rick. He created some incredible shareholder value as CEO of Novellus, the semiconductor equipment company. He bought back stock by the boatload -- the most aggressive buyback I have ever seen - because he thought the company was so undervalued. He was right, as he ultimately sold the company to Lam Research for a 28% premium.
Hill then retired to have fun. But he was drawn to Tessera Technologies (TSRA), an underperforming company with parts that are integral to cellphone camera technology. He served as interim Chairman and was met with a proxy fight from none other than Starboard. Initially, he was against the firm, but ultimately he ended up siding with them -- in part, because he liked the Starboard team so much and thought they were such good guys.
Hill has since become a consultant to Starboard. He would become an amazing interim Chairman, if Starboard wins its proxy challenge against Yahoo!'s Board. I have followed Starboard's progress, particularly its success in throwing out Darden Restaurants' (DRI) Board and replacing the members with its own team. They turned around DRI, the owner of Olive Garden among other chains, in what was nothing short of breathtaking speed.
I don't know if Starboard has the juice to replace the Yahoo! Board. But I do know that if I were on that Board, I would call Rick up and make him Chairman in order to bring out the billions in value I see hidden within that company. Maybe he would do it by breaking it up and selling core Yahoo! to Verizon (VZ), which expressed interest in buying parts -- if not all -- of the company if it is for sale. Maybe he could make it more profitable and put it on a growth path.
Whatever the story, it is Rick who makes the difference. If he gets on the Board, you want to buy Yahoo! Period. End of story.