Form 4: Taboola.com Repurchases Shares from Apollo-Affiliated Entity as Part of Strategic Ownership Management

Taboola.com Ltd. has repurchased 657,141 non-voting ordinary shares from College Top Holdings, Inc., an entity affiliated with Apollo Management and Yahoo Inc., as part of a share repurchase program designed to manage beneficial ownership levels.

Summary

• Taboola.com Ltd. repurchased 657,141 Non-Voting Ordinary Shares from College Top Holdings, Inc. on May 27, 2025.
• The shares were repurchased at a price of $3.43 per share.
• This transaction is part of a Share Repurchase Agreement entered into on February 24, 2025, between Taboola and College Top Holdings, Inc.
• The agreement mandates weekly repurchases of College Holdings' Non-Voting Ordinary Shares at a market-based pricing formula.
• The primary purpose of the repurchase program is to prevent the reporting persons' (Apollo-affiliated entities and Yahoo Inc.) ownership of Taboola's outstanding shares from reaching or exceeding 25%.
• An amendment on March 14, 2025, adjusted the weekly repurchase quantity to up to 1/3rd of the allowable limit under SEC Rule 10b-18.
• The Repurchase Agreement is set to terminate upon the earlier of regulatory approval for College Holdings' equity ownership to exceed 25%, Taboola determining such approval is not required, or December 31, 2025.
• Following this transaction, the reporting persons indirectly beneficially own 33,742,368 Non-Voting Ordinary Shares and 39,525,691 Ordinary Shares.

Sentiment

Score: 6

Explanation: Neutral to slightly positive. The transaction is part of a pre-defined, strategic share repurchase program aimed at managing ownership levels, which indicates proactive corporate governance. It's not a typical open-market sale indicating a lack of confidence, but rather a structured transaction. The price is fixed for this specific transaction, and the ongoing nature implies a commitment to the program.

Positives

• The company is actively managing its share structure and ownership percentages through a structured repurchase program.
• The repurchase program helps maintain a specific ownership threshold for a significant investor (Apollo/Yahoo), potentially indicating a stable and strategic relationship.
• The repurchase price of $3.43 per share provides a clear valuation for this specific transaction.

Negatives

• The repurchase is specifically designed to prevent ownership from exceeding 25%, which might imply regulatory or strategic limitations on the investor's stake.
• The termination conditions for the repurchase agreement (regulatory approval or determination of no approval needed) introduce some uncertainty regarding the long-term ownership structure.

Risks

• Regulatory hurdles: The repurchase agreement's termination is tied to obtaining regulatory approval for College Holdings' equity ownership to exceed 25%, or a determination that such approval is not required. Failure to achieve this could impact the ownership structure.
• Market price fluctuations: The weekly repurchase price is determined by a market-based formula, exposing the company to market volatility for future repurchases.

Future Outlook

The Share Repurchase Agreement is ongoing, with weekly repurchases expected until its termination, which is set for the earlier of regulatory approval for College Holdings' ownership to exceed 25%, a determination that such approval is not required, or December 31, 2025.

Management Comments

• The reported sales are between the Issuer and College Top Holdings, Inc., as part of the Issuer's share repurchase program and are intended to keep the Reporting Persons' ownership of Taboola's outstanding shares from reaching 25% or more.

Industry Context

Share repurchase programs are common tools for companies to manage capital structure, return value to shareholders, or, as in this case, manage ownership percentages for strategic or regulatory reasons. The involvement of Apollo and Yahoo suggests a significant strategic investment in Taboola, with the repurchase mechanism designed to navigate specific ownership thresholds.

Comparison to Industry Standards

• The use of Rule 10b-18 limits for share repurchases is a standard practice to ensure compliance with safe harbor provisions against market manipulation.
• The 25% ownership threshold mentioned is a common trigger for regulatory scrutiny or specific corporate governance provisions in many jurisdictions, particularly for significant shareholders.
• The complex ownership structure involving multiple layers of LPs and GPs is typical for private equity firms like Apollo, demonstrating a sophisticated approach to managing large-scale investments.

Corporate Governance

Related Party Transactions

• Share repurchase transaction between Taboola.com Ltd. and College Top Holdings, Inc., where College Top Holdings, Inc. is indirectly controlled by Apollo Management entities and holds securities on behalf of Yahoo Inc., a significant investor in Taboola.

Stakeholder Impact

• Shareholders: The repurchase program can reduce the number of outstanding shares, potentially increasing earnings per share for remaining shareholders. It also clarifies the strategic ownership intentions of a major investor.
• Apollo/Yahoo (Major Investor): The agreement allows them to manage their stake without exceeding a 25% threshold, which might be beneficial for regulatory or strategic reasons.
• Company (Taboola): Provides a structured way to manage its capital and ownership structure, potentially avoiding issues related to concentrated ownership.

Next Steps

• Continued weekly repurchases of Non-Voting Ordinary Shares by Taboola from College Top Holdings, Inc. as per the Share Repurchase Agreement.
• Potential regulatory review or determination regarding College Holdings' ability to exceed 25% equity ownership in Taboola.
• Termination of the Share Repurchase Agreement by December 31, 2025, or earlier based on regulatory outcomes.

Key Dates

Recommendation

Keywords

Taboola, TBLA, Share Repurchase, Apollo Management, Yahoo Inc., SEC Form 4, Beneficial Ownership, Non-Voting Shares, Corporate Governance, Investment Management