Activist investor TCS Capital Management has built a stake in Yelp Inc and is urging the service-recommendation site to explore strategic options, including a sale, the Wall Street Journal reported, citing people familiar with the matter.
TCS Capital, owning over 4% of the outstanding shares of Yelp’s common stock, ranks among the company’s five biggest shareholders, the report said on Monday. TCS Capital has been an investor in Yelp for most of the past five years, but the stake has not been revealed publicly before.
In a letter to Yelp’s board seen by the newspaper, TCS Capital’s founder, Eric Semler, suggests that Yelp could be sold for at least $70 per share, or more than double the current stock price.
Shares of Yelp closed at $32.52 on Monday.
Semler also intends to tell Yelp’s board that his investment firm, along with a group including an unnamed executive from a similar business, is ready to make a bid for Yelp, according to the report.
Alternatively, Semler plans to say Yelp could explore a tax-free merger with the online-services company, Angi, the report said.
“Yelp maintains an active dialogue with our shareholders and values constructive feedback on our business and ways to create value,” a Yelp spokesperson told Reuters.
TCS Capital Management could not be reached.
Source: Reuters.com