DOW JONES NEWSWIRES
Legg Mason Inc.’s (LM) Capital Management unit - which owns 4.4% of Yahoo Inc.’s
(YHOO) outstanding shares - plans to vote in favor of Yahoo’s proposed slate of
directors at the annual meeting in August, defying Carl Icahn’s efforts to
replace the board with his own slate after Yahoo rejected a takeover by Microsoft
Corp. (MSFT).
“We believe the current board acted with care and diligence when evaluating
Microsoft’s offers,” said Bill Miller, chairman and chief investment officer of
Legg Mason Capital Management.
The asset-management firm added that it believes large shareholders should have
representation on boards if they so desire. Legg Mason said it prefers for Yahoo
and Icahn to reach a mutual agreement for the composition of the board.
Legg Mason also said Microsoft should be willing to negotiate with Yahoo’s
current board, not just with a board led by Icahn.
“While boards are there to protect shareholder interest, shareholders own the
company,” Miller said. “If Microsoft wants to acquire Yahoo, it can make the
terms and conditions of its offer public. If Yahoo shareholders support it, I am
confident the board of Yahoo will accept it.”
Icahn, an activist investor of Yahoo, has been waging a proxy war with the
company over Yahoo’s rejection of a bid by Microsoft to buy the company.
Saturday, Yahoo rejected Microsoft’s latest offer, which had been to buy its
search business. Yahoo had portrayed the deal as being conditioned on the removal
of Chief Executive Jerry Yang and Yahoo’s board, though Icahn said Monday that
Microsoft was “willing to discuss keeping a number of the current board members
and Jerry Yang as Chief Yahoo!”
Icahn called Yahoo’s rejection of the latest offer “another grave mistake that
will be deeply regretted,” along with the $33-a-share offer Yahoo refused last
month.
The Internet search giant has said it is open to any transaction that delivers
full value to stockholders. “We just do not believe such a transaction should be
dictated by Microsoft and a single short-term investor,” Yahoo said when
rejecting Microsoft’s latest offer.
Yahoo shares fell 2% in recent trading, while Microsoft was down 8% amid its
latest quarter’s results falling short of expectations and the company issuing
weaker-than-projected guidance for the current quarter.
-By Shara Tibken, Dow Jones Newswires; 201-938-2168; shara.tibken@dowjones.com
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