NEW YORK (
TheStreet) -- Magazine publisher
(TIME)could be acquired by another magazine publisher,
(MDP), late next year, Citigroup wrote in a note to investors earlier today. Citigroup initiated coverage of Time, which was spun off earlier this month by
(TWX), with a $28 price target and Buy rating.
WHAT'S NEW: Meredith could buy Time in the fourth quarter of 2015, Citi analyst Jason Bazinet predicted. The deal is not likely to occur before then because of the tax-free nature of the Tiime spin-off, the analyst believes. Time shareholders would probably receive $28 per share in a takeover and would have 40%-48% of Meredith's equity following the deal, Bazinet estimated. The combined company could obtain $175M in annual cost savings from the deal and Meredith's stock would likely rise in the wake of the acquisition, the analyst believes.
PRICE ACTION: In early trading, Time fell about 1% to $22.28 while Meredith was also down 1% to $43.80.
Reporting by Larry Ramer.
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