Third Point LLC, an activist shareholder in Yahoo Inc, expressed fresh concern on Tuesday that the Internet company is looking at a sweetheart deal with private equity that could entrench founder Jerry Yang and the current board.

Daniel Loeb, chief executive officer of hedge fund Third Point, said in a statement that Yahoo should consider selling the company as a whole, and its ongoing strategic review should not rob shareholders of any opportunity to obtain a control premium.

Reuters reported previously that Yahoo is in talks with private equity firms about a deal to sell a minority stake while giving them effective control of the company.

As significant shareholders with our own fiduciary duties to investors to uphold, we cannot stand by silently if such reports are accurate and Yahoo, a company in no need of cash, plans to engage in a sweetheart deal, Loeb said in the statement.

He added that in order to ally investor concerns and provide transparency on the strategic review process, Yahoo should make public the letters in which it invited third parties to make proposals for the company.

Yahoo's board fired CEO Carol Bartz in September and hired Goldman Sachs and Allen & Co to conduct a strategic review.

(Reporting by Soyoung Kim; Editing by Gary Hill)

Yahoo Sale