Feb. 12 (Bloomberg) -- Legg Mason Capital Management raised its stake in Countrywide Financial Corp., the biggest U.S. mortgage lender, to 15 percent and said it hasn't decided whether to vote for Bank of America Corp.'s $4 billion takeover.

Countrywide should remove a ``poison pill'' designed to discourage takeovers, fund manager Bill Miller said today in a letter to investors. His firm previously held a stake of about 12 percent and may acquire as much as 25 percent, the letter said. Baltimore-based Legg Mason was already the biggest stakeholder of Countrywide, based in Calabasas, California.

Shareholders and analysts have split on whether Countrywide got a fair price from Bank of America, the nation's second- largest bank. Investors including SRM Global Fund, which held a 5.2 percent stake, have said the bid is too low, while Paul Miller of Friedman Billings Ramsey Group Inc. contends Bank of America is overpaying because of Countrywide's continued losses.

``We were quite surprised by the decision to sell the company at close to a seven-year low in the stock price, and agreeing to a bid that amounts to only 30 percent of book value,'' Bill Miller's letter said.

Countrywide gained 25 cents, or 3.8 percent, to $6.90 a share in New York Stock Exchange composite trading. Bank of America rose 68 cents, or 1.6 percent, to $42.82.

The agreement to buy Countrywide reflects ``a negotiated price,'' said Robert Stickler, a spokesman for Bank of America, in an interview. ``We believe it is fair for both companies.''

Growth Ahead

Kenneth Lewis, the bank's chief executive officer, declined to take questions about Countrywide after a speech today in Raleigh, North Carolina. Rick Simon, a Countrywide spokesman, didn't immediately respond to a message seeking comment.

Bank of America, based in Charlotte, North Carolina, agreed to buy Countrywide in January after the stock lost 85 percent of its value in a year. The bank's takeover bid equates to less than $8 a share.

Countrywide ``was seeing solid deposit growth, has no apparent capital problems, was not forced by the regulators to seek a merger partner, and is in sufficiently sound condition to have declared its regular quarterly dividend at the end of January,'' Miller wrote.

The company has anti-takeover defenses that penalize anyone who acquires a stake of more than 15 percent, Miller said. His firm asked Countrywide to eliminate the provisions, since the company has already agreed to be acquired, in case Legg Mason decides to buy more shares.

Trailing the Market

Miller's $16.5 billion Legg Mason Value Trust, part of Legg Mason Inc.'s mutual fund family, is entering its third straight year of trailing the Standard & Poor's 500 Index. The fund had fallen 11 percent this year through yesterday, lagging behind the S&P 500's 8.6 percent decline. His 15-year streak of beating the main U.S. equity benchmark ended in 2006. The money manager is known for making contrarian bets and holding them for years.

Bank of America's offer is about equal to the value of Countrywide's loans held for investment minus a 10 percent discount, with virtually no value placed on Countrywide's industry-leading loan origination and servicing businesses, said Gary Gordon, an analyst at Portales Partners in New York.

``I thought Bank of America got a very, very good deal and I have some sympathy for Bill Miller's view,'' Gordon said.

The transaction would give Bank of America almost 25 percent of U.S. mortgage originations and about 17 percent of home loan billings and collections.

To contact the reporters on this story: David Mildenberg in Charlotte, North Carolina, at dmildenberg@bloomberg.net;

Last Updated: February 12, 2008 16:50 EST