Yahoo rumors of a possible acquisition has sent company stock soaring. One analyst says that the chance of Yahoo selling is rising. Jordan Rohan of Stifel Nicolaus has boosted his rating on the search engine company to Buy from Hold, setting an $18 price target, to reflect his view of an 80% chance the company will be acquired.
Yahoo! (Nasdaq: YHOO) Shares spiked higher in early-morning trade Friday following rumors suggest the company may ultimately be purchased by Alibaba.
Shares of Yahoo! last traded at $14.50, up 3.7 percent from Thursday’s closing price. The stock is up more than 12 percent since ousting CEO Carol Bartz on Sept. 6th.
“The erosion in fundamentals… along with pressure from activist shareholders has prioritized the outright sale of the company over the option to remain independent,” Rohan wrote in a note.
Rohan also said Microsoft Corp had the most to gain from the buyout of Yahoo for its display and search assets. It could play a central role in any private-equity outcome, if it doesn’t choose to pursue the role as an acquirer.
Whether the purchaser is Microsoft, AOL, Silver Lake, or someone else, if Yahoo sells now, it likely wonâ€™t fetch the kind of price Microsoft once offered for the company.
In February 2008, Microsoft, Corporation made an unsolicited bid to acquire Yahoo for USD $44.6 billion. Yahoo subsequently, formally rejected the bid, claiming that it “substantially undervalues” and was not in the interest of its shareholders. Three years later, Yahoo had a stock market capitalization of USD $22.24 billion.