The brokerage also raised its price target on Yahoo's stock to $34 from $31, saying it believed Microsoft remained committed to its offer and "is capable of and willing to" increase that bid to conclude the deal.
I am not sure whether the Citigroup analyst is right or not about the $34 price target (I am loathe to accept any analyst predictions on target price after Bear Stearns collapse!). We will know in due course at what price the deal is finally struck. I still strongly believe that Microsoft's original offer is fair and that Yahoo really does not any convincing alternative bids that can be shown to the shareholders to woo them away from Microsoft's bid. Microsoft may propose a different financial structure that more accurately reflects the stock prices of the two companies and also takes into account Yahoo's latest performance results. But, in the end, it will be in the same ballpark--not significantly higher!
From my point of view, as I wrote earlier, Yahoo should refrain from any more delay tactics. A combined Microsoft-Yahoo entity still faces regulatory challenges and post-merger integration hurdles. Time's of the essence!