Bill Miller of Legg Manson which has 4.4% of Yahoo's stock stated that he was in favour of the current board of directors continuing and would vote accordingly.
Earlier Icahn had complained that the board of directors at Yahoo were not keen on selling the company to Microsoft Corp. With a new board selected by him he wanted to see the deal happen.
This public statement has significance especially when one looks at the past where Miller had been undecided on who to vote for. The annual shareholder meeting of Yahoo Inc is scheduled to be held on August 1, 2008.
In a statement made to the press Miller said, "We have met with representatives of the current board and management, including founder Jerry Yang, several times. We believe the current board acted with care and diligence when evaluating Microsoft's offers. We believe the board is independent and focused on value creation for long-term shareholders."
Having 16% of Yahoo's stock Capital Research Global and Capital World Investors, divisions of Capital Group are the two biggest investors followed by David Filo, Yahoo co-founder having 5.7% of stock is the third and then Legg Mason.
Gordon Crawford of Capital World had also expressed his unhappiness with the current board. The combined stock value of Icahn, Capital World and John Paulson would be 18.5% compared to 14% put together by Yang, Filo and Legg Manson.
A large investor yet to decide on how to vote, referring to the current board said "Yahoo has gotten the upper hand in the strategy of the process, at this point, it looks like they are likely to hold on to a majority".
Investors feel Icahn lost the edge when he went all out in support of moving Yahoo's search related business to Microsoft. Yahoo rejected it and said only a new board would go for such a deal.
Keeping acquisition in mind Microsoft is trying to do everything possible to get Yahoo's price down. Miller brought to focus what Microsoft and Icahn had said earlier about not being able to get the deal done with the existing board.
The argument coming from Yahoo is that a board backed by Icahn would not able to get the best deal from Microsoft especially so since Icahn does not seem to have any other plan in place.
Miller agreed with others that Microsoft should not be able to decide who they bargained with. "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," said Miller.
Miller also said that the on going tussle would prove "disruptive" and requested the parties to come to a consensus on how the board should be.
Insiders aware of what's happening see Icahn getting few of the board seats but no comments were available from either Icahn or Microsoft. Collins-Stewart analyst Sandeep Aggarwal felt that release of Yahoo's earnings report on Tuesday would disappoint those on Wall Street.
On Thursday, as part of it talking about its quarterly profit, Microsoft reported weak online ad spending. Eric Schmidt, Chief Executive of Google Inc said they are facing "a more challenging economic environment." Though both these companies had strong growth both failed to meet the expectations of analysts'.
Yahoo shares rose by a penny to $22.45, while Google's came down 10% to $481.32 and Microsoft shares slid 6% to $25.86
With recommendations from an advisory group, RiskMetrics expects that next week will reveal that the Yahoo board saga is set to take yet another turn. It is equally possible that Microsoft can come back as well with a new offer to place on the table.
