03/28/2008 02:45 am ET Updated May 25, 2011

Yahoo's No. 2: No. 2 Shareholder: Microsoft To Raise Bid, Yahoo To Take It

Legg Mason owns 80 million shares of Yahoo and is the company's second-largest shareholder. Portfolio manager Bill Miller has met with Microsoft's Steve Ballmer and talked with Jerry Yang since the offer was made. His key conclusions, expressed in a letter to fundholders:

* Microsoft needs to raise its offer.
* Yahoo needs to accept it.

Bill is obviously talking up his book here, but as Yahoo's second largest shareholder he has significant influence. His view reinforces our conviction that a deal will be struck in the low- to mid-$30s in relatively short order.

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