Legg's Miller says Microsoft needs to boost Yahoo offer

BOSTON, Feb 12 (Reuters) - U.S. money manager Legg Mason Inc's (LM.N) key fund manager Bill Miller said Microsoft Corp (MSFT.O) will have to raise its $41.6 billion takeover offer for Yahoo Inc (YHOO.O).

"We think MSFT (Microsoft) will need to enhance its offer if it wants to complete a deal," Miller said in his quarterly letter to investors, which was released on Tuesday. Legg Mason is the second biggest shareholder of Internet firm Yahoo.

Miller's letter is dated Feb. 10, a day before Yahoo rejected Microsoft's offer as too low.

Miller, famous for steering the $16.5 billion Value Trust LMVTX.O to 15 straight years of outperformance versus the Standard & Poor's 500 index .SPX till 2006, also said he was surprised by mortgage finance firm Countrywide Financial's CFC.N move to sell itself to Bank of America (BAC.N) at a low price.

Legg is the biggest shareholder of Countrywide.

(Reporting by Muralikumar Anantharaman)