Yahoo shareholder Eric Jackson announced Tuesday that he's dropping his efforts to launch a proxy fight against the Internet search pioneer, citing cost concerns of going it alone.
Jackson's decision comes as billionaire financier Carl Icahn is weighing a possible proxy fight, according to a CNBC report.
Icahn is said to have begun amassing 50 million shares of Yahoo stock late last week, according to the CNBC report. Shares of Yahoo, which dipped last week after, climbed 3.4 percent in late morning trading to $26.12 per share on speculation that Icahn may wage a proxy fight.
Meanwhile, earlier in the day, Jackson, in an interview with CNET News.com, gave himself a 40 percent chance of moving forward with his bid, citing the challenges of persuading other partners to help him in his efforts and getting enough dissident directors to take control of Yahoo's board.
Jackson, as well any other Yahoo shareholder, would have until the close of the business day Thursday to submit a list of dissident director nominees to run against the Internet company's board of directors at the next. Jackson owns less than 100 shares of Yahoo.
To date, Jackson had found four potential candidates to run for the 10 board seats that will be up for re-election to a one-year term at the shareholders' meeting. And although Jackson was shooting for 10 members to run for the board, he needed at least 2 more to gain control.
But the greater obstacle that stood in Jackson's way was finding partners who would join him in his efforts to launch a proxy fight.
"It takes a big financial commitment to run a campaign. There's legal costs, proxy solicitor costs, mailing costs, and it could easily cost more than a million bucks, depending on how much Yahoo wants to battle," said Jackson, who runs hedge fund Ironfire Capital.
He also noted that partners could find dissident directors as well.
But in reaching out to potential partners, he found that a number of them had never been involved in proxy fights and were hesitant to join in, he noted.
"It's like trying to get the first penguin off the ice flow," Jackson said. "If you get one off, the rest will follow."