Yahoo investor calls for peace talks with Icahn

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Another Yahoo investor has spoken out in support of talks between the board and outspoken shareholder Carl Icahn.

Eric Jackson has urged fellow shareholders to vote for a board comprising five existing directors and four nominees proposed by billionaire investor Icahn.

Jackson, who leads a group of 146 investors holding 3.2 million Yahoo shares, said that, while he supported Icahn, he recognised that major shareholders may not. So he proposed a "third option" to create a new board that is more responsive to shareholders' concerns.

Icahn, who owns more than four per cent of Yahoo, launched a proxy battle in May to replace the web pioneer's board in the wake of Microsoft’s failed takeover bid.

"Neither side running for election can guarantee that Microsoft will ever come back to the table with an offer for Yahoo," Jackson said in a statement. "We must accept that reality and select a board to do the best job in the current situation (even as distasteful as the situation is).

"I want Icahn to win outright, but I am putting forward this "Third Option" because I fear several large shareholders will worry about the operational abilities of Icahn and his team."

Yahoo last week signed a web search advertising deal with Google after talks with Microsoft broke down.

Jackson became the star of Yahoo's 2007 annual meeting when he accused then-chairman and chief executive Terry Semel of mismanaging the company and failing to do more to revive its falling stock price. He also spearheaded a campaign against board-nominated directors, resulting in a hefty minority vote against the reelection of Semel, who stepped down soon after.

In May, Jackson launched a "vote no" campaign, reaching out to Yahoo shareholders via the internet to urge them to vote against Yahoo directors.

Jackson said that the three members of Yahoo's compensation committee, including chairman Roy Bostock, and a fourth director, Softbank Capital's Eric Hippeau, should not be re-elected.

"I frankly hold Mr. Bostock more responsible (than Yahoo chief executive Jerry Yang) for the break-down in talks with Microsoft," wrote Jackson, who runs investment firm Ironfire Capital and personally owns only a handful of Yahoo shares.

"He supposedly has much more experience in such deal-making matters than Yang," Jackson wrote "and I find it puzzling that he would choose not to attend that fateful meeting on 3 May in Seattle, which led to Microsoft finally pulling the plug on their offer."

Yang met Microsoft chief executive Steve Ballmer on 3 May in a last attempt to negotiate before the software giant rescinded its offer to buy all of Yahoo.

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