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Yahoo Escapes Ironhorse Grip; For Now

Vocal Yahoo dissident shareholder Eric Jackson has decided not to run a competing slate of directors to replace Yahoo's board.

I have just spoken with Jackson, who runs Ironhorse Capital and whose 150 members hold 3.3 million shares of Yahoo stock , and he tells me the $1 million cost to mount a proxy war was simply too prohibitive for him and his team. He tells me he has spoken to a number of hedge funds and asset managers who fully supported a competing slate, but that their message was clear: "We can't support you because we don't want to be painted as activists."

Many outsiders thought that Jackson was the most likely individual to put together a group of dissident investors and a competing slate of directors to run against the current Yahoo board.

Instead, Jackson will proceed with what he calls a vigorous "vote-no" campaign against Yahoo's existing board. And he promises a far more vocal campaign than the one he mounted last year, which some experts say was instrumental in the later ouster of Yahoo CEO Terry Semel.

Last year's campaign led to three directors receiving a surprising 36 percent "no vote," and he says that with the meeting this year not until July, he and his group will have additional time to wage an even more effective campaign.

As far as whether someone will step forward with a competing slate of directors, Jackson tells me he isn't hopeful. "I just hope they won't take the approach that, 'We'll get $31 or $33 a share so vote us in.' Instead, they should say, 'We want a better board, a more independent board that truly represents the voices of the shareholders.'"

He says he's aware of speculation that Carl Icahn may run his own board by launching a proxy war of his own, but that Yahoo's board will likely escape the proxy battle many thought was an almost certainty after the $47 billion unsolicited bid from Microsoft was ultimately shelved.

The deadline for a competing slate of directors to be nominated is Thursday, May 15. Of course, Yahoo just recently, through some work with Google and discussions with AOL , ducked a Microsoft overture.

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