Zynga Rises on Speculation Yahoo Might Consider Buyout
By Lisa Rapaport
Bloomberg
Mar 11, 2013 10:19 AM CT
Zynga Inc., the biggest maker of online social games, climbed to the highest price since July on speculation that Yahoo! Inc. might consider buying the company.
The shares rose 7.9 percent to $3.85 at 11:15 a.m. in New York, after earlier touching $3.90. The stock had advanced 51 percent this year through March 8, compared with a 9.1 percent gain for the Russell 1000 Index.
Yahoo may consider buying Zynga as Chief Executive Officer Marissa Mayer seeks acquisitions to bolster the U.S. Web portal’s mobile and social capabilities, Blake Harper, an analyst at Wunderlich Securities Inc., wrote in a research report today. Since Mayer arrived, Yahoo has ceded share in its core business of display advertising amid mounting competition from Google Inc. and Facebook Inc.
With a market value of about $3 billion, Zynga might be an attractive target if Mayer opts for deals valued at more than $1 billion, Harper said. Yahoo might also look at purchasing food-review sites Yelp Inc. (YELP) and OpenTable Inc. (OPEN), or Millennial Media Inc. (MM), which offers mobile advertising, Harper said.
Representatives from Sunnyvale, California-based Yahoo and Zynga, based in San Francisco, couldn’t immediately be reached for comment, nor could those for Yelp or OpenTable. A spokesman for Millennial Media declined to comment.
To contact the reporter on this story: Lisa Rapaport in New York at lrapaport1@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
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