Yext CEO Abandons $9/shr Acquisition; Pursues $150M Share Repurchase Instead

Michael Walrath, CEO and Chairman of Yext Inc., has terminated his previously announced offer to purchase remaining company shares at $9 per shr. In a significant shift from the original buyout strategy, the company’s board of directors has now greenlit a $150 million Dutch auction self-tender program targeting common stock.

Why the Original $9/shr Deal Fell Through

Walrath notified the board that securing debt financing for the acquisition at the proposed price proved unfeasible. Despite the withdrawal, he reaffirmed his commitment to lead the company going forward. The board expressed continued confidence in his leadership direction, signaling stability despite the change in corporate strategy.

New Dutch Auction Strategy Moves Forward

The special committee of independent directors has approved an alternative approach: a Dutch auction mechanism for share repurchases. This reverse auction process allows shareholders to submit bids within a price range, potentially offering more flexibility than a fixed-price buyout. The self-tender program is poised to commence this month, funded through a combination of company resources and debt financing arrangements.

Market Reaction and Stock Performance

The market responded swiftly to the announcement. Yext shares fell 22.01% to $5.60 in pre-market trading on the New York Stock Exchange, reflecting investor concerns about the deal’s collapse. The significant decline suggests market participants had priced in the original acquisition proposal and viewed the shift to a share buyback program as a less attractive alternative.

The Dutch auction represents a pivot in capital allocation strategy, allowing the company to potentially repurchase shr at market-determined prices rather than a fixed valuation.