Icahn to run board slate for Yahoo: Sources

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Billionaire investor Carl Icahn is moving ahead with plans to run a dissident board slate at Yahoo Inc in a bid to force the Internet company to sell itself Microsoft Corp, sources familiar with the matter said on Wednesday.

Icahn, who has amassed a large stake in the Internet company over the last week, has lined up at least 12 potential board candidates and could announce the slate as early as Wednesday night, the sources said. The deadline for nominating a dissident slate is Thursday for the July 3 annual meeting.

Frank Biondi, a veteran media executive and former head of Viacom Inc who has worked with Icahn on activist campaigns at Time Warner Inc and Motorola Inc, has agreed to be a nominee, sources said.

Big Yahoo investors have publicly chastised the company for failing to seal a buyout deal with Microsoft, which abruptly ended talks earlier this month after balking at Yahoo's $37 per share asking price.

Microsoft, which offered a sweetened bid of $33 per share, or $47.5 billion, has given no indication that it would revive the talks, whether or not a new slate is elected, posing a significant risk to Icahn's plans.

Since Microsoft dropped its offer, Microsoft executives have reaffirmed publicly they are no longer interested in pursuing Yahoo. On Wednesday, Microsoft declined comment.

Ryan Jacob, portfolio manager of the Jacob Internet Fund, which holds around 150,000 Yahoo shares, said Icahn will probably prevail in his effort to win board seats.

"There's a reasonable chance that Icahn can be successful," said Jacob. "There's a lot of shareholder unhappiness right now, including ours. It's encouraging because there's the chance that they can be more successful in consummating a transaction with Microsoft."

It was unclear if Icahn plans to run a full slate of ten new directors at Yahoo, or a "short slate," or non-control position. The details have yet to be worked out, sources said.

In previous proxy battles, Icahn has nominated a large slate and settled for a smaller slate after negotiations with the company. In a battle with Motorola Inc this year, Icahn put forth a slate with four nominees, but ultimately settled with the company for two board seats.

Icahn reached out to virtually all the candidates on a Microsoft-sponsored board slate that the software company withdrew this month, sources said.