Jeff Smith Bullish On Yahoo, Darden, MeadWestvaco

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Jeff Smith is a Managing Member and the Chief Executive Officer and Chief Investment Officer of Starboard Value L.P. (‘Starboard’). Prior to founding Starboard, Mr. Smith was a Partner and Managing Director at Ramius LLC and the co-founder and Chief Investment Officer of the funds that comprised the small cap value and opportunity investment platform. Prior to joining Ramius in January 1998, Mr. Smith served as Vice President of Strategic Development for The Fresh Juice Company, Inc. Mr. Smith began his career in the Mergers and Acquisitions department at Société Générale. Jeff Smith spoke today at the Capitalize For Kids Conference in Toronto and presented his favorite idea. Below are some (very) informal notes from Smith who explained Starboard Value’s plan for Darden Restaurants, Inc. (NYSE:DRI).

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Also see: Guy Gottfried Pitches Long Tree Island Steel At Capitalize For Kids and Lee Ainslie Pitches Long Qihoo 360 At Capitalize For Kids

Jeff Smith of Starboard Value doing his typical pitch for Starboard (see every conference he has spoken at for background, haha)

Jeff Smith on Darden Restaurants, Inc. (NYSE:DRI)

Proposed plan

1 operational improvement

2 evaluation of all options for the company’s real estate holdings

3 evaluate the most logical and efficient combination of restaurant concepts

4 evaluate initiatives to franchise certain concepts and take advantage intl growth prospects


Got all 12 seats on the board

Massive change in the atmosphere now at DRI

This was a landmark event and should be a warning to all companies — they need to at least listen


Jeff Smith on Yahoo! Inc. (NASDAQ:YHOO)

Shareholders called Starboard, they are frustrated

41b market cap

Alibaba Group Holding Ltd (NYSE:BABA) — 15% stake remains   value: $35B pre tax

Yahoo japan 35.5% stake   value 7.5b

Cash 7.4b

Core operating business has value (5.5 ebitda x 1b in ebitda)


Full value 62b


Why does the discrepancy exist?

they are selling BABA stake and paying full taxes

if they pay full taxes 80% of the discrepancy goes away


Find a tax structure that is efficient


Price target $63 (50% upside)


Yahoo has an annual elected board, and a meeting coming up march 2015

due to their lock up period for 60 days post BABA spin, they are NOT allowed to talk about how they are going to monetize their remaining stake


Jeff Smith on MeadWestvaco Corp. (NYSE:MWV)

Consolidated packaging company

They WILL spin the non-core Specialty Chemical business and the Real estate piece

Corporate overhead is crazy high, 3x higher than comps

Capex has been going up every year

NEED to improve operating margins

Reduce corp overhead

Improve capital allocation

Explore alternatives to unlock value of pension assets

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