However, in a statement on their website Blackpool have criticised the actions of Leeds.
"The board feel Leeds have acted completely unprofessionally and underhandedly and have shown a total disregard for the rules and regulations that govern football," said the statement.
They have reported Leeds for an alleged breach of Football League regulations 20.1 and 20.2.
Regulation 20.1 states that no club shall take any steps to induce or attempt to induce another club's employee to terminate his contract of employment with that other club.
Regulation 20.2 states that no club will make contact or enter into negotiations relating to the the employment of another club's employee.
Why should we let Leeds think they get away with such a blatant disregard for the rules?
Blackpool chairman Karl Oyston
The statement also claims that Leeds made their final approach after they had rejected Grayson's letter of resignation.
"At 12.15pm, the club were notified that Leeds United 'had been aware' that Simon Grayson had resigned from the club's employment and that he had accepted their offer of employment as manager and that he had signed a contract with Leeds," the statement added.
Blackpool chairman Karl Oyston also considered taking out an injunction to prevent Grayson from taking charge of Leeds on Boxing Day.
"Why should we let Leeds think they get away with such a blatant disregard for the rules?," said Oyston.
"If it was legally possibly we would have pushed hard for an injunction against Simon Grayson to stop him taking charge of Leeds.
"But it's not easy to get in front of a High Court judge at this time of year.
"I think Leeds knew that and that's a point that we will be making in our case against them."
Grayson, 39, succeeds Gary McAllister, who was sacked on Sunday after a run of five straight defeats.
And Bates explained why he had opted for the former Leeds trainee.
"We're delighted to welcome Simon to the club," added Bates.
"I like him and he has a real personality, which is important. He's got a good track record, he knows our opponents, he knows the level we're at and he can get us out.
"He started his career here and he knows the club. He's a Yorkshireman as well and we have to have someone who is committed to living and working in this area."
Grayson guided Blackpool to promotion to the Championship in 2007 after two years in charge.
As a player, Grayson started his career at Elland Road, making just four senior appearances for Leeds before joining Leicester City in March 1992.
A £1.3m move to Villa followed five years later, before three years at Blackburn Rovers.
And he had loans at Sheffield Wednesday, Stockport County, Notts County and Bradford City before finishing his playing career at Bloomfield Road.
He then inherited the Blackpool hot seat in June 2006 following the departure of Colin Hendry - and won promotion to the Championship via the League One play-offs in his first season.
After consolidating Blackpool's position in the Championship, he has now dropped back down a level to League One. But Grayson admits that he could not resist the chance to join his boyhood heroes.
"When the opportunity came to come here I couldn't wait to be involved as quickly as possible," Grayson told the Leeds website.
"They're a massive club and close to my heart, having played here before and supporting the club. The size and the ambition is obviously an attraction as well.
"I had a great time at Blackpool. I had a great rapport with the fans and the board. I certainly wouldn't have dropped down a division for any other club. I feel this is the next stage of my managerial career.
"I know there is an expectancy level and it's a challenge I'm looking forward to."
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