"[Microsoft] will need to enhance its offer if it wants to complete a deal," wrote Miller. "It will be hard for [Yahoo] to come up with alternatives that deliver more value than [Microsoft] will ultimately be willing to pay," Miller wrote. "We think this deal is a strategic imperative for [Microsoft] and that [Yahoo] is in a tough spot if it wishes to remain independent." Legg Mason Capital Management holds 80 million shares of Yahoo, which is just over 6-percent of the company. Legg Mason is second only to Capital Research and Management, which owns 11-percent.