Third Point backs Icahn in Yahoo fight: source

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 and is supporting investor Carl Icahn's proxy battle.

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 and is supporting investor Carl Icahn's proxy battle, a source familiar with the matter said on Tuesday.

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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, has been aimed at pressuring Yahoo to agree to a deal to be sold to Microsoft, which broke off talks earlier this month.

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.