Legg: Icahn support up if ensures Yahoo price

By Kenneth Li

SUN VALLEY, Idaho (Reuters) - Carl Icahn would have more support in his proxy battle against Yahoo Inc if he pledged not to sell the company for less than $33 a share, Legg Mason portfolio manager Bill Miller said on Tuesday.

Miller's Legg Mason Capital Management is the third-largest institutional shareholder of Yahoo, with a 5.23 percent stake as of March 31, according to a regulatory filing.

While billionaire investor Icahn was not expected to attend the Allen & Co media and technology conference in Sun Valley, Idaho, he and his target Yahoo were the center of attention.

Icahn, who owns more than 4 percent of Yahoo, is seeking to replace the Web company's board and Chief Executive Jerry Yang at an August 1 shareholders meeting.

His bid got a major boost on Monday, when Microsoft Corp said it was willing to immediately resume deal talks with Yahoo if it elected a new board.

When asked if he would back Icahn's board slate for Yahoo, Legg Mason's Miller told Reuters on the sidelines of the annual Allen & Co conference, "The difficulty with Icahn is he'd have more shareholder support if he would say he wouldn't sell the company for less than $33."

Talks between Yahoo and Microsoft broke down in early May. Microsoft originally offered Yahoo $31 per share and raised it to $33, or $47.5 billion, but Yahoo demanded $37 per share.

The software company said on Monday it was willing to resume talks to buy all or part of Yahoo with a new board, but it would be premature to discuss details such as price.