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Microsoft could up Yahoo bid

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With frenzied speculation over potential rival bids, and interference being run by Google, some analysts are predicting that Microsoft will up its initial offer of $44,6-billion to buy Yahoo.

Reuters reports that while Yahoo shares closed yesterday at $28,98 – more than $2 per share lower than Microsoft's $31 per share offer – investment bank UBS had set its price target for the company at $34, saying Microsoft "will do what is needed to get this deal done".
"In a hostile deal the acquirer usually does not lead with its best and final offer and we would not be surprised to see Microsoft sweeten the pot somewhat to make the decision easier for Yahoo's board," says UBS.
Reuters adds that another investment bank, Citi, says a raised bid by Microsoft is the most likely of five scenarios it sees happening.
Citi has a $31 target price, but says there is a 40% chance that Microsoft would raise its bid and make the acquisition after Yahoo rejects the initial offer.
"It's reasonable to assume that Microsoft might be willing to increase its offer," Reuters quotes analyst Mark Mahaney as saying.