Major Yahoo Shareholder: Microsoft “Blundered” With Hostile Tactics

The Wall Street Journal reports this morning that Yahoo’s second largest shareholder, investment firm Legg Mason, characterized Microsoft’s recent ultimatum letter as a tactical “blunder” and said it would support Yahoo’s independence if Microsoft maintained or lowered its current offer.

The article also reports, however, that an informal survey of 20 institutional Yahoo shareholders by the investment firm Piper Jaffray found “the majority suggest they favor the current deal to no deal.” But the Legg Mason statements are significant nonetheless.

The Microsoft gambit appears to be setting the stage for a hostile takeover, in which it would seek to nominate a more sympathetic slate of board candidates to replace the existing board, which has twice rebuffed Microsoft’s offer as too low. The support of shareholders would be critical for either side in such a battle.

The Legg Mason position, presented by portfolio manager Bill Miller, seeks a sweetened offer from Microsoft:

Mr. Miller said that the current value of Microsoft’s offer — $29.17 per share as of 4 p.m. Nasdaq market trading Tuesday — “is not something I’m too excited about.” He said the original $31-per-share value of Microsoft’s offer was also too low because it was an initial bid, and he didn’t recall many unfriendly takeovers where the final price was the opening bid.

Legg Mason, according to the WSJ, doesn’t own Microsoft, unlike Capital Research & Management Co., which does. The latter is Yahoo’s largest institutional shareholder and doesn’t want to see the value of Microsoft shares fall further even as it seeks value for its Yahoo shares.

Legg Mason’s public statements are almost certainly an effort to pressure Microsoft to reconsider its position and raise its bid.

Related Topics: Channel: Industry | Microsoft & Yahoo Search Deal


About The Author: is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling.

Connect with the author via: Email | Twitter | Google+ | LinkedIn


Get all the top search stories emailed daily!  


Other ways to share:

Read before commenting! We welcome constructive comments and allow any that meet our common sense criteria. This means being respectful and polite to others. It means providing helpful information that contributes to a story or discussion. It means leaving links only that substantially add further to a discussion. Comments using foul language, being disrespectful to others or otherwise violating what we believe are common sense standards of discussion will be deleted. Comments may also be removed if they are posted from anonymous accounts. You can read more about our comments policy here.

Comments are closed.

Get Our News, Everywhere!

Daily Email:

Follow Search Engine Land on Twitter @sengineland Like Search Engine Land on Facebook Follow Search Engine Land on Google+ Get the Search Engine Land Feed Connect with Search Engine Land on LinkedIn Check out our Tumblr! See us on Pinterest


Click to watch SMX conference video

Join us at one of our SMX or MarTech events:

United States


Australia & China

Learn more about: SMX | MarTech

Free Daily Search News Recap!

SearchCap is a once-per-day newsletter update - sign up below and get the news delivered to you!



Search Engine Land Periodic Table of SEO Success Factors

Get Your Copy
Read The Full SEO Guide