Citigroup Raises Yahoo Target To $34 Based On Revised Microsoft Bid

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Citigroup has raised its Yahoo price target to $34/ share based on their belief that Microsoft will revise its takeover offer.

Citigroup analyst Mark Mahaney said in a research note that “We believe that a Yahoo sale to Microsoft — at a price higher than the initial $31 bid is the most likely outcome” and that the limited combined market share of the combined companies would raise no significant issues with Government regulators.

Infoworld on Mahoney:

Mahaney said Microsoft is unlikely to walk away from the deal because it has yet to make significant inroads in the area of online advertising, especially against market leader Google, despite efforts to do so for the past three to four years. The only way Microsoft could compete with Google would be to acquire Yahoo, the analyst said.

Yahoo shares closed at $28.73 Tuesday, up 4.4%.

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