Legg Mason's Miller to Icahn: Put Up, Or Shut Up

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The pitched battle between billionaire investor Carl Icahn and Yahoo for control of its board could hinge on whether Icahn can convince the company’s two largest institutional investors to vote for his alternate slate of directors. Those two investors are Gordon Crawford of Capital Research and Bill Miller of Legg Mason. As of May 7, they each controlled 16 percent and 6.7 percent of Yahoo stock, respectively. Icahn owns at least 4 percent. That’s more than a quarter of the voting shares between the three of them.

Crawford has reportedly threatened Yahoo that he might throw his support behind Icahn, although he hasn’t done it yet. And that was before Icahn’s Gossip Girl pact with Steve Ballmer to jointly destroy Yahoo.

Did that pact make any difference to change the minds of Crawfod or Mason? Asked by Reuters reporter Ken Li at the Allen Company conference in Sun Valley, Mason replies:

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.

In other words, put up or shut up. Despite plotting for hours with Steve Ballmer, the only agreement Icahn got out of Microsoft was to come back to the negotiating table to discuss another deal. And why wouldn’t Microsoft talk to a new board charged with selling the company? It could probably get it for a steal, certainly less than the $31 a share it originally offered. And you can forget about that $33 offer it later dangled in front of Yahoo, only to be rejected by Yang & Co.

Mason is basically saying that if Icahn can do the impossible and turn back the clock, he’d vote for Icahn’s board. Otherwise, investors would just be handing Microsoft the company for whatever price it wants. But Microsoft is not going to agree to any new price before the August 1 shareholder meeting.

It sounds like Ichan still has some convincing to do.

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