If Microsoft lowers the value of its offer to buy Yahoo, Legg Mason has indicated that they will back Yahoo’s efforts to ward off a take over and remain independent. As Yahoo’s second largest shared holder, Legg Mason owns 7% of Yahoo stock and is one of the few shareholders that has publicly come out and stood up for the company.
After Microsoft threatened in a letter this weekend to lower its offer, Bill Miller of Legg Mason said, “Telling the shareholders you’re going to take something away from them is not a way to get their support.”
Miller indicated that the current $29 bid is “not something [he's] too excited about”, but didn’t say definitively that he would refuse a lower bid:
“If Microsoft lowers the price I’m not prepared to say that’s better than Yahoo remaining independent,” he said.
So it sounds like Legg Mason is sticking up for Yahoo and making a last-ditch effort to try to get Microsoft to bump up their offer, but they also aren’t saying that they would refuse Microsoft’s money. Although not excited by Microsoft’s offer, they might still take it and run, which is bad news for Yahoo. Further bad news for Yahoo is Miller’s dismisal of the idea that Yahoo would be able to put together an alternative deal.