Yahoo! today announced that it has entered into an agreement to repurchase 40 million shares of Yahoo! common stock beneficially owned by Third Point LLC, at a purchase price of $29.11 per share. The purchase price equals the closing price of Yahoo! common stock on July 19, 2013.

Third Point, headed by Daniel Loeb, last year settled a proxy battle with Yahoo. Third Point will still own about 20 million shares, less than 2 percent of the Internet media company's common stock.

Following the repurchase, Third Point will beneficially own approximately 20 million shares, representing less than 2 percent of Yahoo!'s outstanding common stock. Each of the directors originally nominated by Third Point -- Daniel S. Loeb, Harry J. Wilson, and Michael J. Wolf -- have submitted their resignations from Yahoo!'s board of directors, effective July 31, 2013, Yahoo said.

After the deal, about $700 million will remain under a $5 billion overall buyback authorization that Yahoo announced last year.