DOJ, at FTC Request, Sues Third Point Related to Yahoo

Third Point and three Third Point funds violated premerger reporting laws in connection with their 2011 acquisition of stock in Yahoo, the FTC said in a news release Monday. The defendants claimed they were exempt from reporting to the U.S. antitrust authorities because the purchases were made solely for investment purposes, the agency said. But Third Point made investment decisions that were inconsistent with an investment-only intent, such as communicating with third parties to determine interest in becoming CEO or board candidates at Yahoo, the FTC said. The commission voted 3-2 to refer the complaint and proposed settlement to DOJ. Commissioners Maureen Ohlhausen and Joshua Wright, on his last day at the FTC (see 1508170051">1508170051), voted no. “Commissioners Ohlhausen and Wright do not take issue with our conclusion that there is reason to believe that an HSR [Hart-Scott-Rodino Act] violation occurred, but they do question whether the public interest supports a referral of this matter for enforcement,” Chairwoman Edith Ramirez and Commissioners Julie Brill and Terrell McSweeny wrote in a joint statement. “We conclude that it does.” In their joint dissenting statement, Ohlhausen and Wright said the majority misunderstood their reasoning for opposition. “Our opposition ... does not hinge solely on the risk of competitive harm from Third Point’s acquisitions of Yahoo Stock,” they said. “It is based on the lack of competitive harm.” DOJ also filed a proposed settlement that would settle the charges against Third Point and its funds if approved by the court, Justice said. Written comments on the proposed settlement will be subject to a 60-day public comment period, DOJ said. Third Point didn’t comment.