Tiscali to weigh action over Citi target cut

MILAN, Jan 23 (Reuters) - Italy's Tiscali SpA (TIS.MI) will weigh possible moves against U.S. bank Citigroup Inc. (C.N) over a cut in its price target that helped push the stock sharply lower, the Internet service provider said on Friday.

In a report titled "Dire Straits," Citigroup analyst Mauro Baragiola slashed his price target for Italy's No. 3 broadband operator to 0.15 euro ($0.194) from 1.25 euros on Wednesday. He kept his "sell" rating on the stock.

Tiscali's shares fell 18 percent on Thursday and traders cited the report as a factor. Trading was halted on Friday with the shares indicated down another 18 percent, but they rallied to close up 10.82 percent at 0.4505 euro.

Tiscali "will consider whether to undertake any action to protect its image and the interests of its shareholders," it said in a statement made at the request of bourse regulator Consob.

The Citigroup report was released during "extremely turbulent market conditions," it said.

The report followed one in August 2008 that kept the "sell" rating and the target at 1.25 euros even though it was well above the market price, Tiscali said.

In the report, Baragiola cited worsening conditions for cash and for mergers and acquisitions as reasons for the price target cut.

Tiscali said on Wednesday it was cutting 250 jobs at its domestic unit and was still in talks to sell its British assets. The company said in November it was in talks with British Sky Broadcasting Group Plc (BSY.L) about selling the assets. (Reporting by Ian Simpson; Editing by Gary Hill) ($1=.7719 Euro)