Billionaire investor Carl Icahn has elected to move ahead with plans to run a dissident board slate at Yahoo, sources familiar with the matter told Reuters on Wednesday.

Shiho Fukada / AP Carl Icahn

Icahn, who has amassed a large stake in the Internet company, 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.

Big investors in Yahoo have publicly chastised Yahoo for failing to seal a buyout deal with Microsoft

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[MSFT  Loading...      ()   ], which abruptly ended talks earlier this month after balking at Yahoo's $37 per share asking price.Icahn's move would have the ultimate goal of pressing Yahoo to agree to be sold, assuming Microsoft is still willing to consummate a deal.

Shares of Yahoo rose more than 2 percent after the bell on Wednesday after word of Icahn's decision. The shares closed

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[YHOO  Loading...      ()   ] at $27.14 on Nasdaq.

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," for a non-control position. The details have yet to be worked out, sources said.

One industry expert said he would likely have a better chance with a short slate, since it is unlikely that investors would allow a complete takeover of the board and the attendant uncertainty that such a move would have at Yahoo.

"It's handing the company over to an entirely different team," said Bruce Goldfarb, partner in Okapi Partners, a proxy advisory firm. "While a dissident slate would obviously have a mandate to sell the company, investors just don't give up control without a premium. If Microsoft was on board, he'd have a chance."

The move on Yahoo is the latest of a number of proxy battles that Icahn has recently waged. Last month, Motorola settled a proxy battle with Icahn by agreeing to add two of Icahn's four nominees to its board.

Representatives of Yahoo and Microsoft declined to comment.

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