Citigroup Expects Microsoft To Increase Its Price To Acquire YAHOO And Raise YAHOO'S Target Share Price.

2008/10/11 9:54:00 121

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Citigroup Microsoft Acquired YAHOO To Raise Its Share Price.

According to InfoWorld website reported on March 25th, Citigroup investment research department analysts said that Microsoft will likely raise YAHOO's bid price of $44 billion 600 million.

Analyst MarkMahaney said: "we think Microsoft is likely to raise its bid price of $31 per share in the end."

YAHOO's board rejected Microsoft's initial offer, saying the offer underestimated YAHOO's value.

Mahaney also said that the market share of the two companies after merger is still limited, so mergers and acquisitions will not be opposed by government regulators.

Citigroup raised YAHOO's target price from $31 to $34 per share, considering Microsoft would raise its offer.

Mahaney pointed out: "YAHOO's strategic value to Microsoft is very obvious."

He believes that Microsoft is unlikely to give up the deal, because Microsoft is working hard to develop Internet advertising business, especially for Google, the industry leader.

Analysts believe that the only way for Microsoft to compete with Google is to acquire YAHOO.

Mahaney said YAHOO is still actively looking for other bidders, thereby preventing Microsoft from buying the initiative.

However, no company can compete with Microsoft.

In his view, the possible future situation also includes the cooperation between YAHOO and Time Warner. Time Warner is likely to offer Internet content business to YAHOO in exchange for a share of YAHOO.

Mahaney points out that this may prompt Microsoft to further raise its offer.