Legg: latest Microsoft offer for Yahoo unappealing

BOSTON (Reuters) - A portfolio manager at Legg Mason Capital Management said on Sunday he found the latest proposal for Yahoo Inc (YHOO.O: Quote, Profile, Research, Stock Buzz) from activist investor Carl Icahn and Microsoft Corp (MSFT.O: Quote, Profile, Research, Stock Buzz) to be "unappealing."

Legg Mason (LM.N: Quote, Profile, Research, Stock Buzz) is the second-largest institutional shareholder of Yahoo, with a 5.23 percent stake as of March 31, according to a regulatory filing.

"Our position is we prefer that Microsoft reenter negotiations to buy the entire company. $33 (per share) would be an attractive price," said Robert Hagstrom, whose Legg Mason Growth Trust counts Yahoo as its top holding as of end-March.

"We have made no decision on Icahn because we have no information about how he would run the company if Microsoft does not buy Yahoo. Furthermore, the latest developments to sell Yahoo search to Microsoft is unappealing."

Yahoo said on Saturday it had rejected a joint proposal from Icahn and Microsoft that would involve selling Yahoo's search business to the software maker, and handing control of the remainder of the company to Icahn.

(Reporting by Murali Anantharaman, writing by Tiffany Wu, editing by Martin Golan)