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Investment house Third Point has issued an open letter to the board of Yahoo! claiming that co-founder Jerry Yang is colluding with private equity investors to buy control of the company.

In a strongly worded letter, Daniel Loeb, head of Third Point (the second largest investor in Yahoo!), called on Yang to clarify his position and, if he is involved in such discussions, to step down from the board immediately. Loeb said that he would hold the board of directors personally responsible if they did not act, and demanded his company get two seats on the board to provide oversight.

“We are deeply concerned by news reports that you are considering a leveraged recapitalization that will allow private equity firms to gain substantial equity positions that will, when combined with Jerry Yang’s and David Filo’s ownership, effectively establish a controlling position in Yahoo!,” the letter reads.

“More troubling are reports that Mr. Yang is engaging in one-off discussions with private equity firms, presumably because it is in his best personal interests to do so. The Board and the Strategic Committee should not have permitted Mr. Yang to engage in these discussions, particularly given his ineptitude in dealing with the Microsoft negotiations to purchase the Company in 2008.”

Loeb has a habit of releasing these open letters, particularly when Yahoo! is involved, but even by his standards the letter is strongly worded. He names Jim Coulter of Texas Pacific Group, Jonathan Nelson of Providence Equity Partners, Glenn Hutchins of Silver Lake, Henry Kravis of KKR, and Stephen Schwarzman of Blackstone as the partners discussing a takeover with Yang.

The Register requested comment from Yahoo! but nothing has been forthcoming. ®

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