Jin Lee | Bloomberg | Getty Images
Jeremy Stoppelman, chief executive officer of Yelp Inc.
Yelp, the review site for restaurants and local businesses, has hired Evercore to help defend the company against an activist investor, who recently called for a board shake-up and potential sale, according to people familiar with the matter.
Hedge fund manager SQN, which owns 4 percent of Yelp shares, released a presentation on Jan. 16, about the company’s “significant underperformance,” and said that based on its own research “an immediate sale to a private equity firm could yield a $47 to $50 stock price.” The shares are currently trading at $37.59.
Yelp co-founder and CEO Jeremy Stoppelman and the board have now tapped Evercore to work with the company and explore the market, but the bank hasn’t started running a sales process, said the people, who asked not to be named because the matter is confidential. At the current market valuation of over $3 billion, there are few, if any, “credible buyers,” one of the people said.
Representatives from Yelp and Evercore declined to comment.
SQN’s report suggests that the company is worth $4 billion or more. But SQN, a technology-focused hedge fund with more than $1.1 billion in assets, is a virtual unknown in the world of activist investing, where Carl Icahn, Bill Ackman and Daniel Loeb are among the most recognizable and influential players. Yelp is SQN’s first activist investment.