NEW YORK (TheStreet) -- Magazine publisher Time Inc. (TIME)could be acquired by another magazine publisher, Meredith (MDP - Get Report), 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 Time Warner (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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