In an intriguing twist of events, more than the chief executives of Yahoo! and Microsoft, it's some of the biggest shareholder of the companies airing their views about the $31 per share bid being befitting or not.

Yahoo Inc's second-biggest shareholder has asked Microsoft Corp. to increase its $44.6 billion bid for the company, and has warned Yahoo! that it isn't left with many options than to accept the offer. This has further raised the pressure on the top management to close the deal. Some real trying times for Yahoo! indeed.

This Tuesday, Bill Miller, the popular stock-picker Legg Mason Inc and an institutional Yahoo! shareholder has estimated the value for Yahoo! to be near $40 per share, which is clearly $9 more than Microsoft's bid.

Miller had earlier expressed his unhappiness about the bid being too low and just a day before Yahoo! formally rejected the offer he said that the Redmond giant, "will need to enhance its offer if it wants to complete a deal… It will be hard for (Yahoo) to come up with alternatives that deliver more value than (Microsoft) will ultimately be willing to pay…We think this deal is a strategic imperative for (Microsoft) and that (Yahoo) is in a tough spot if it wishes to remain independent."

The stake of institutional shareholders in Yahoo! is about 75% and only 10% stake is held by the company insiders including Jerry Yang.

If analysts are to be believed then bid stands a chance to be raised to $35 per share, and perhaps $40. If we do see a surge in the bid's pricing it would be worth noting how Microsoft would raise the funds to finance the deal then.

On the other hand, Bob Olstein, who has about a million shares in Microsoft Corp, has asked the company to resist any efforts by the potential acquiree to raise the $31 dollar per share bid any further.

In a letter addressed to Microsoft's chief financial officer Christopher Liddell, he has strongly expressed himself as, "Under no circumstances should you raise your price," said Olstein. "We believe your recent offer for Yahoo is materially above Yahoo's value as an independent company."

Moreover, Olstein wants the deal to be an all-cash one, as this option would dilute the Redmond giant's earnings only by 7 cents compared to, 19 cents for an all-stock deal.

All in all, at present Yahoo! seems to have been left with two main options, one is to let itself be acquired by Microsoft's and the other to outsource its search to Google.

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