Third Point's Loeb Preps Proxy Battle at Yahoo!

NEW YORK ( TheStreet) -- Daniel Loeb is officially fed up with Yahoo!'s ( YHOO) board.

According to a letter disclosed in a Securities and Exchange Commission filing late Wednesday, the hedge fund manager, whose firm Third Point LLC owns more than 70.5 million Yahoo! shares, has given Yahoo! CEO Scott Thompson a heads-up that he plans to launch a proxy battle to get a fair shake for his slate of four nominees to director posts.

Loeb said in the letter that Yahoo!'s reaction to his plans to nominate four new board members -- Harry Wilson, Michael Wolf, Jeff Zucker and himself -- has been "dismissive" and that he plans file a preliminary proxy statement "within the week."

" T he Board's stonewalling, apparent insouciance and decision not to engage with us in a serious manner, has left us no choice but to directly approach our fellow owners with the Shareholder Slate," Loeb wrote.

Loeb argued that Yahoo!'s nominating and corporate governance committee hasn't seriously considered Third Point's slate of candidates, conducting only short interviews and giving no indication of next steps in the evaluation process.

"This approach is particularly nonsensical given the fact that shareholders have been clamoring for change for some time, and I do not believe that even you can realistically imagine that Yahoo!, in its current state of flux, will find four nominees that are as qualified to serve as the Shareholder Slate," he wrote.

Yahoo! shares have floundered as the company has struggled to reinvent itself as a content aggregator while Google ( GOOG) gobbles up Internet search traffic market share. The stock closed Wednesday's regular session at $14.63, down 11% in the past year.

Loeb also said in the letter that Third Point is amenable to having Gary Wilson, a former chief financial officer at Marriott International ( MAR) and Walt Disney ( DIS), remain on the board as chairman for a year following the expiration of current chairman Harry Bostock's term.

-- Written by Michael Baron in New York.

>To contact the writer of this article, click here: Michael Baron.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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