TCS Capital Management, an activist investor, has acquired a stake in Yelp and is recommending that the service-recommendation website explore strategic options, such as a potential sale, according to sources familiar with the matter as reported by the Wall Street Journal.
According to a report on Monday, TCS Capital holds over 4% of Yelp’s outstanding shares and is among the company’s top five shareholders. TCS Capital has been investing in Yelp for most of the past five years, although this stake has not been publicly disclosed until now.
In a letter addressed the board of Yelp, Eric Semler, founder of TCS Capital, proposes the potential sale of Yelp at a price of $70 per share, which is over double the current stock price.
Semler plans to inform Yelp’s board that his investment firm, along with a group that includes an unidentified executive from a comparable business, is prepared to make an offer for Yelp, as per the report.
According to the report, Semler suggested that Yelp might consider a tax-free merger with Angi, an online-services company.
“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.