A battle of billionaires Carl C. Icahn hopes to oust Yahoo's board and CEO Jerry Yang.

The battle for control of Yahoo Inc. pits two billionaires against each other in a race to the Internet company's annual shareholder meeting on July 3.

Investor Carl C. Icahn is threatening to oust Yahoo's board of directors - including Jerry Yang, the Sunnyvale, Calif., company's chief executive officer. Icahn says Yahoo botched a takeover offer from Microsoft Corp., initially valued at $44.6 billion and later raised to $47.5 billion, or $33 a share.

Yahoo wants $4 a share more. It has said Icahn has a "significant misunderstanding" of Microsoft's offer and the response of Yahoo's board, signaling that Yang will fight to keep control.

Yesterday, a shareholder group added intrigue by accusing the company of trying "to whitewash embarrassing documents" in a lawsuit against it.

In a letter to a judge in Wilmington, the shareholders said they thought Yahoo believed the information in the documents would damage the company's efforts to repel Icahn.

The group is suing Yahoo, alleging that the company's board improperly thwarted Microsoft's bid.

Yahoo is trying "to sanitize the public record and maintain a cloak of secrecy regarding unflattering evidence of breach of fiduciary duty," shareholder attorney Joel Friedlander wrote in yesterday's letter to Chancellor William B. Chandler III.

The redacted documents include information about an employee severance plan that Yahoo adopted shortly after Microsoft made its initial bid Jan. 31 and notes about a conversation between Yang and Microsoft chief executive Steve Ballmer, Friedlander wrote.

Yahoo had no comment on his letter. Companies often seek to keep parts of publicly available lawsuits under seal for competitive reasons.

A hearing on the request to unseal the disputed material is set for Tuesday, said Mark Lebovitch, another lawyer representing shareholders.

The concealed information was gathered during the discovery phase of the nearly three-month-old suit. If made public, the documents could become fodder in Icahn's campaign to remove Yahoo's board.

The information would be particularly damaging to the board if it suggested the directors deliberately took steps to make Yahoo more expensive for Microsoft.

Icahn, who owns about 10 million shares and options to buy an additional 49 million, on Thursday named a slate of 10 nominees, including himself, to replace the board at Yahoo's July 3 meeting.

Yahoo late Thursday disputed Icahn's assertion that its directors had "botched" the takeover talks.

But Yang, who cofounded Yahoo in 1995, faces mounting pressure to reconsider his rejection of Microsoft's $47.5 billion bid.

John Paulson, who runs the New York hedge fund Paulson & Co., said that he would back Icahn's slate and that he was disappointed Yahoo had failed to reach a deal with Microsoft. Paulson & Co. owned 50 million shares of Yahoo, the second-most-popular Internet search engine, as of March.

"We do not believe it is in the best interests of Yahoo stockholders to allow you and your handpicked nominees to take control," the company's chairman, Roy Bostock, said in a letter to Icahn late Thursday. He said Yahoo's directors were the most qualified to boost the company's value.

Yahoo shares fell 9 cents yesterday to $27.66 in Nasdaq trading. The stock had declined 32 percent in the 12 months before Microsoft announced its bid on Jan. 31. The shares fell $4.30, or 15 percent, after Microsoft withdrew its bid on May 3.

Yang sent letters to employees and managers that echoed the company's letter to Icahn, asking workers to stay focused on day-to-day operations, according to regulatory filings yesterday.