The
wire service said Wednesday that Bill Miller, who heads Legg Mason
Capital Management, a unit of Legg Mason Inc., wrote in a quarterly
letter to investors last week that the estimated fair value for Yahoo! is near $40 per share. Microsoft has offered $31 per share in cash
and stock, which Yahoo! has rejected as too low.
Microsoft
"will need to enhance its offer if it wants to complete a deal," Miller
wrote in the Feb. 10 letter. "It will be hard for [Yahoo!] to come up
with alternatives that deliver more value than [Microsoft] will
ultimately be willing to pay," Miller wrote. "We think this deal is a
strategic imperative for [Microsoft] and that [Yahoo!] is in a tough
spot if it wishes to remain independent."
Legg
Mason Capital Management owns more than 80 million Yahoo! shares, or 6%
of the company, trailing only Capital Research & Management's 11%
holding.
Miller's
comments came as major institutional Yahoo! shareholders have been
working behind the scenes to get the parties to strike a deal, analysts
told Reuters. About 53 of the top 100 big funds in Yahoo! hold shares in
both companies, according to the most recent shareholder data available
from September. - Peter Moreira
See Reuters item
See TheDeal.com story Yahoo! must play weak hand
See TheDeal.com story Yahoo!, Microsoft play chicken
