Large shareholder have been unhappy with Yahoo! since it failed to close a deal with Microsoft back in 2008. The deal would have joined Yahoo! and Microsoft and, as many believe, made the brand much more valuable. Yahoo! is currently seeking to revamp leadership through a complete overhaul of their board.

Meanwhile, some stockholders are still calling for sealed documents containing particulars about the Microsoft deal, to be opened. Dan Loeb, an activist investor and Third Point hedge fund CEO, wants the documents opened. He needs to know what happened to the deal which offered to buy Yahoo! stocks from shareholders at $31 per share.

Yesterday, Yahoo! three new independent board members, but Leob is not one of them. Leob is upset by the announcement and says he has plans to fight the new appointments. As owner of over 5% of the company, he feels the deal with Microsoft should still be pursued and intends to put up a proxy fight.

Yahoo!, on the other hand, feels that adding Loeb to the board is a bad idea. The new appointments to the board will take their positions in April and include; John D Hayes, chief marketing officer at American Express; Peter Liguouri, former chairman and president of Fox Broadcasting; and Thomas McInerney, chief financial officer of Interactive Corporation.

Here’s what Third Point and Dan Loeb had to say about their conflict with Yahoo and the new board members!:

“Since we launched our campaign for a better Yahoo!, our goal has been clear: to fix a dysfunctional Board by adding new Directors who are truly independent and squarely aligned with shareholders to increase Yahoo!’s value.”

“Third Point offered several significant compromises to strike a deal and avoid a proxy contest. Today, the Board has shown yet again that they are unable to execute deals that are in the Company’s best interests. Sadly for shareholders – who will once more bear the costs – the consequence of the Board’s refusal to accept Third Point’s shareholder-friendly proposals will be a time-consuming and distracting proxy contest that the Company can ill-afford.”

“The Board’s decision today demonstrates once again that one of Yahoo!’s paramount principles of corporate governance is ‘Shareholders not welcome’. In the absence of independent shareholder oversight, the Yahoo! Boards of the past five years have given shareholders five CEOs and strategic plans in as many years and seriously damaged the value of the core business, a fact masked only by the increasing value of Yahoo’s Asian assets.”

“Since the Board has left us with no choice but to take our case directly to our fellow shareholders, Third Point intends to move forward with a proxy contest. Yahoo!’s shareholders deserve a voice and a choice. We intend to provide them with one at this year’s Annual Meeting.”

So Third Point plans to fight Yahoo! and the battle probably won’t be a quiet one, as Loeb suggests. We’ll have to wait and see what he does in the coming months, the new appointments to the board take hold in just a couple weeks. Perhaps it would be a good idea for Yahoo! to try and buy Loeb out of the company.