Things have been quiet on the Microsoft-Yahoo front over the past couple weeks, but Citigroup analyst Mark Mahaney has thrown some fuel back on the fire today by suggesting that Microsoft will raise its $31 per share bid in a note to clients. As such, Mahaney upped his price target on Yahoo shares to $34, representing roughly an additional $4 billion to the $44.6 billion that Microsoft has already offered in cash and stock to acquire the company.
Infoworld has some additional details on Citigroups’ reasoning:
Mahaney said Yahoo is aggressively pursuing other alternatives to Microsoft's unsolicited takeover bid, although he doesn't see any competing bidders for the company.
However, one possibility would be to tie up with Time Warner, whereby Time Warner would contribute its online content to Yahoo in exchange for a stake in the company, he said.
"We believe this could serve as a forcing function to a higher Microsoft bid," Mahaney said