(Adds disclosure from Pickens about investment)
By Dane Hamilton
NEW YORK May 20 Third Point LLC, a $5.7
billion hedge fund headed by activist Dan Loeb, has recently
accumulated a stake of over 5 million shares in Yahoo Inc
YHOO.O and is supporting investor Carl Icahn's proxy battle,
a source familiar with the matter said on Tuesday.
Third Point, which held 1 million shares in Yahoo as of
March 31, may build a stake of up to 10 million shares in the
company, the source said.
Icahn's proxy contest, launched last week, is aimed at
pressuring Yahoo to agree to be sold to Microsoft. The software
maker broke off talks earlier this month after Yahoo rejected
its offer to buy the company for $47.5 billion, or $33 per
share, but the companies said Sunday they have revived talks.
Another investor said he was backing Icahn. Oil investor T.
Boone Pickens told broadcaster CNBC he has acquired 10 million
shares in Yahoo, saying: "(Icahn) jumps in first, I jump in
For his part, Loeb "strongly supports Icahn and supports
his slate and thinks that he is shining a bright light on the
botched process at the Yahoo board in negotiating the deal with
Microsoft," said the source, who requested anonymity because
Loeb's position has not been publicly disclosed.
Loeb, known for his acerbic letters to senior officials of
companies he deems to be underperforming, believes Yahoo should
be sold to Microsoft.
"They haven't laid out a game plan that gets you to the
value of $33 to $34 per share on a stand-alone basis," this
Paulson & Co, another large hedge fund, disclosed last week
that it recently built up a stake of 50 million shares in Yahoo
and is supporting the Icahn move.
All totaled, Icahn backers have acquired or plan to
accumulate about 80 million Yahoo shares, or more than 5
percent of Yahoo's nearly 1.4 billion shares outstanding, as of
March 31. That does not include Icahn's options to buy an
additional 49 million Yahoo shares.
Yahoo shares closed down 20 cents, or 0.7 percent, at
$27.48 on Nasdaq.
(Additional reporting by Daisuke Wakabayashi, editing by Derek
Caney and Andre Grenon)