Yahoo has found itself in the crosshairs of an activist investor more than once, and it’s happening again. This time it’s moving dangerously close to a proxy battle. Management’s turnaround tactics have not proven successful or even shown any progress at all, and so it sounds like Starboard Value is getting sick and tired of waiting.

Can Yahoo! Inc. (YHOO) Avoid A Proxy Battle With Starboard?

With the last earnings report, Yahoo revealed plans to streamline its businesses further and said it is considering selling off some of its assets, although there’s been debate about just how serious management is about selling any part of the business. Shareholders were wildly unhappy with the weak results and management’s attempts to placate them with yet another set of plans that might not save the company.

Starboard Value said to target proxy battle with Yahoo

Now Bloomberg reports that Starboard has taken the first steps toward initiating a proxy fight. The media outlet’s sources reportedly said that Okapi Partners, which is a proxy solicitation advisory firm that Starboard often uses, has been contacting Yahoo shareholders. It’s very common for a firm like Okapi to start calling shareholders before a proxy battle is initiated, so this news appears to signal that a fight is imminent. Such calls are typically meant to get a feel for what other shareholders want to see in order to test the waters and drum up support for the activist’s claim.

It’s believed that Starboard intends to start pushing for new directors to be appointed to Yahoo’s board very soon, possibly within the month. Last month, Starboard called for a major management shakeup, saying that “significant changes” are needed. The activist investment firm held a less than 1% stake in the digital ad company as of the end of December.

Yahoo CEO Mayer still under fire

If a proxy battle does ensue, it would just be the latest challenge of many facing CEO Marissa Mayer, who has been under fire virtually since taking the helm. Starboard first threatened a proxy fight in November when it said it intended to push for seats on Yahoo’s board.

Starboard CEO Jeff Smith said in a public letter last month that selling the company’s core business is now the best possible outcome for shareholders. The company pursued a spinoff of its stake in Alibaba and Yahoo Japan last year but reversed course when challenges were put up to block the spin from being tax-free.

Smith said they would seek “significant changes to the board if you continue to make decisions that destroy shareholder value.” The window of time for Starboard to seek seats on the board starts next week and lasts for approximately one month, reports Bloomberg, citing company filings.

Yahoo shares were up slightly at $29.50 per share as of this writing.