Legg Mason sides with Yahoo

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One of Yahoo's major investors has pledged support for the company's board of directors.

Capital Management firm Legg Mason said that it will be voting in favor of retaining the board at next month's shareholders meeting.

Legg Mason owns some 60.7 million shares of Yahoo stock, roughly a 4.4 per cent stake in the company.

"We have met with representatives of the current Board and management, including founder Jerry Yang, several times," said company chairman and chief investment officer Bill Miller.

"We believe the current Board acted with care and diligence when evaluating Microsoft's offers."

The announcement puts Legg Mason firmly in Yahoo's camp and at odds with fellow investor Carl Icahn, who is attempting to take over the board at the meeting and replace it with a group which promises to facilitate a sale of some or all of the company to Microsoft.

While the firm is backing the board, Miller also expressed hopes that the two sides could reach a compromise.

"We would prefer that the company and Mr. Icahn reach a mutual agreement on the composition of the Board and end this disruptive proxy contest," he said.

Miller also did not rule out his company's approval of a possible sale to Microsoft, either through Icahn's board or Yahoo's current board. Microsoft has said that it cannot negotiate with Yahoo's board as it stands.

"If Microsoft wants to acquire Yahoo, it can make the terms and conditions of its offer public,' said Miller.

"If Yahoo shareholders support it, I am confident the Board of Yahoo! will accept it."
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