July 18, 2008, 11:12 AM — Legg Mason, one of the largest holders of Yahoo stock, will back the company's recommendations for its board of directors instead of those offered by dissident investor Carl Icahn.
Legg Mason, an investment firm based in Baltimore, announced Friday it will back Yahoo's slate of candidates in a stockholders meeting Aug. 1. Legg Mason owns about 60.7 million shares, or about 4.4 percent, of Yahoo's stock.
Icahn, also a major investor, has been pushing Yahoo to accept offers from Microsoft to buy all or part of the company.
Legg Mason officials have met with Yahoo's current board and management several times, Bill Miller chairman and chief investment officer at Legg Mason said in a statement. "We believe the current board acted with care and diligence when evaluating Microsoft's offers," Miller added. "We believe the board is independent and focused on value creation for long-term shareholders."
In general, it's appropriate for large shareholders to seek representation on corporate boards, Miller said, and Icahn's board slate includes experienced businesspeople. Legg Mason would prefer if Icahn and Yahoo "reach a mutual agreement on the composition of the board and end this disruptive proxy contest," Miller said.
Microsoft has made multiple offers, and it's clear that it and Icahn believe the current Yahoo board won't negotiate with Microsoft, Miller continued. "While boards are there to protect shareholder interests, shareholders own the company," he 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."
On Thursday, Yahoo CEO Jerry Yang and Chairman Roy Bostock sent a letter to shareholders criticizing the efforts of Microsoft and Icahn.
"Your Board of Directors believes strongly that the Icahn-Microsoft agenda -- as presented to us jointly last week -- will destroy stockholder value at Yahoo!, serving only their very narrow special interests, clearly not your interests," the letter said.