Microsoft Urged To Raise Bid By No. 2 Shareholder

Microsoft Urged To Raise Bid By No. 2 Shareholder

Yahoo Inc's (YHOO.O) second-biggest shareholder urged Microsoft Corp (MSFT.O) to raise its $42 billion bid for the Web pioneer and warned Yahoo it has few options other than to accept, raising pressure for them to seal a deal.

In a quarterly letter to investors released on Tuesday, Bill Miller, the star stock-picker at U.S. asset manager Legg Mason Inc (LM.N), estimated fair value for Yahoo to be near $40 per share, versus Microsoft's original offer of $31 per share.

Microsoft "will need to enhance its offer if it wants to complete a deal," Miller wrote in a letter dated February 10, one day before Yahoo formally rejected Microsoft's proposal for the company.

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