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SUN VALLEY, Idaho (Reuters) - Carl Icahn would have more support in his proxy battle against Yahoo Inc if he pledged not to sell the company for less than $33 a share, Legg Mason portfolio manager Bill Miller said on Tuesday.
Miller's Legg Mason Capital Management is the third-largest institutional shareholder of Yahoo, with a 5.23 percent stake as of March 31, according to a regulatory filing.
While billionaire investor Icahn was not expected to attend the Allen & Co media and technology conference in Sun Valley, Idaho, he and his target Yahoo were the center of attention.
Icahn, who owns more than 4 percent of Yahoo, is seeking to replace the Web company's board and Chief Executive Jerry Yang at an August 1 shareholders meeting.
His bid got a major boost on Monday, when Microsoft Corp said it was willing to immediately resume deal talks with Yahoo if it elected a new board.
When asked if he would back Icahn's board slate for Yahoo, Legg Mason's Miller told Reuters on the sidelines of the annual Allen & Co conference, "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."
Talks between Yahoo and Microsoft broke down in early May. Microsoft originally offered Yahoo $31 per share and raised it to $33, or $47.5 billion, but Yahoo demanded $37 per share.
The software company said on Monday it was willing to resume talks to buy all or part of Yahoo with a new board, but it would be premature to discuss details such as price.
Separately, The Wall Street Journal said on Wednesday that Yang accused Microsoft of trying to destabilize the Internet company without a real desire to complete a deal.
"I think that the destabilizing by Microsoft has become more and more intentional. I am not happy about it," Yang told the paper.
He also hit back at Icahn and said, "To trust Mr. Icahn and his board is really a bad choice."
In a Reuters interview on Monday, Icahn argued that his proposed dissident board slate would make Microsoft feel more secure in risking a large sum of capital to complete the deal during the regulatory approval process.
Yahoo's biggest investor, Capital Research, has told Yang it may vote against the board in the proxy fight, the blog AllThingsD has reported.
Yahoo shares rose 73 cents, or 3 percent, to close at $24.64 on Nasdaq on Tuesday.
Additional reporting by Pratish Narayanan in Bangalore; Editing by Richard Chang, Braden Reddall and Lincoln Feast