Yahoo has responded to investor Carl Icahn's threat to take control of Yahoo's board and force it back to the negotiating table with Microsoft. The search company said Icahn's proposal shows "a significant misunderstanding" of how it handled Microsoft's offer, and argued that Yahoo's current board remains "the best and most qualified group" to handle its affairs.

In a letter to Yahoo made public earlier Thursday, Icahn said he planned to nominate 10 candidates to replace the incumbent directors on Yahoo's board. He argued that Yahoo was wrong to reject Microsoft's offer to buy the company for $33 per share, and said he hopes to install a new board at Yahoo's shareholder meeting in July that will resume talks with Microsoft.

Later in the day Yahoo released its response to Icahn, signed by board chairman Roy Bostock.

"Unfortunately, your letter reflects a significant misunderstanding of the facts about the Microsoft proposal and the diligence with which our board evaluated and responded to that proposal," the company wrote. "A fair-minded review of the factual record leads to one conclusion: that Yahoo!'s ten-member board, comprised of nine independent directors along with Yahoo CEO Jerry Yang [cq], remains the best and most qualified group to maximize value for all Yahoo stockholders."

Yahoo also noted that Microsoft has withdrawn its offer to buy the company, and that currently there is no other bid on the table.

(More to come.)