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Yahoo shareholder will support if Microsoft lowers bid

Yahoo's second-largest shareholder, Legg Mason, has said that it will back the search engine if Microsoft decides to lower its takeover offer.

Bill Miller, Legg Mason's portfolio manager, told the Wall Street Journal that his company is prepared to support an independent Yahoo, if Microsoft carries out the threat it made at the weekend.

He added that the original bid made by Microsoft of $44.6 billion (£22.3 billion), or $31-per-share, was too low.

"If Microsoft lowers the price I'm not prepared to say that's better than Yahoo remaining independent."

Microsoft's chief executive, Steve Ballmer, issued an ultimatum at the weekend in a letter addressed to Yahoo's board of directors, stating that if an agreement had not been concluded within three weeks, then the software giant would be "compelled to take our case directly to your shareholders".

Yahoo's chief executive Jerry Yang rejected the letter on Monday (April 7th), describing it as "counterproductive and inconsistent with your stated objective of a friendly transaction". ADNFCR-1536-ID-18543791-ADNFCR