Analyst: MS Will Raise Offer for Yahoo

Citigroup said it is likely Microsoft will raise its $31-per-share offer for Yahoo and upgraded Yahoo shares to "buy" from "hold."

The brokerage also raised its price target on Yahoo’s stock to $34 from $31, saying it believed Microsoft remained committed to its offer and "is capable of and willing to" increase that bid to conclude the deal.

"While we continue to see no other competing bidders, we believe Yahoo is aggressively pursuing strategic alternatives," analyst Mark Mahaney said in a note to clients.

One possibility is a tie-up with Time Warner, whereby Time Warner would contribute its online content assets to Yahoo in exchange for a stake, the analyst said.

"We believe this could serve as a forcing function to a higher Microsoft bid."

Citigroup said it continues to view a Microsoft-Yahoo deal as the most likely outcome.

Yahoo shares closed at $27.52 Monday on Nasdaq.

CIO Insight Staff
CIO Insight Staff
CIO Insight offers thought leadership and best practices in the IT security and management industry while providing expert recommendations on software solutions for IT leaders. It is the trusted resource for security professionals who need network monitoring technology and solutions to maintain regulatory compliance for their teams and organizations.

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