* Raises Yahoo stock to "buy" from "hold"
* Keeps price target of $18
* Shares up 3 pct before the bell
Sept 22 Stifel Nicolaus said the likelihood of
Yahoo Inc (YHOO.O) being bought out has risen to 80 percent, and
upgraded the Internet pioneer's stock to "buy" from "hold."
Yahoo's shares rose 3 percent to $14.35 before the
bell on Thursday.
"The erosion in fundamentals...along with pressure from
activist shareholders has prioritized the outright sale of the
company over the option to remain independent," analyst Jordan
Rohan wrote in a note.
He has estimated a bid to range between $18 and $22 a share
and said he continued to believe that the Alibaba Group was
worth $35 billion, or $10 a share.
Much of Yahoo's valuation is ascribed to its roughly 40
percent stake in China's Alibaba, the parent company of websites
including Alibaba.com and Taobao.
Rohan also said Microsoft Corp (MSFT.O) 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.
Private equity firms have turned their attention to Yahoo,
which is reportedly seeking to sell itself after firing Chief
Executive Carol Bartz on Sept 6 and attracting the ire of
activist-investor Daniel Loeb. [ID:nS1E78I05M]
Yahoo's shares closed at $13.96 on Wednesday on Nasdaq.
(Reporting by Shravya Jain in Bangalore; Editing by Sriraj
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Keywords: YAHOO/ RESEARCH STIFEL
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