Here is an interesting fact from a story on Reuters. Almost 90 percent of Yahoo’s institutional shareholders also hold Microsoft, found RiskMetrics Group, a financial risk management analysis company. Plus, most of these institutional investors have significantly more money invested in Microsoft. Therefore, in a weird twist of fate, most of Yahoo’s big investors would not want to see Microsoft overpay for Yahoo.
Now, this insight runs counter to some news reports that Yahoo’s investors want to see and offer worth $40/share. As the Reuter’s story notes:
Earlier this week, Yahoo’s second biggest shareholder, Legg Mason, urged Microsoft to raise its offer. In a letter to investors, Bill Miller, the star stock-picker at the U.S. asset manager, estimated that fair value for Yahoo was around $40 per share. RiskMetrics said this was not a big surprise since Legg Mason is one of three of Yahoo’s top 20 institutional shareholders with significantly more money invested in Yahoo than Microsoft.
However, it would be highly unlikely if any of the other institutional investors urged Microsoft higher. Those folks are almost certainly advocating a behind-the-scenese face-saving alternative for both the Microsoft and Yahoo boards that benefited Microsoft.
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