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 10 percent to $3.91 at the close in New York. The stock has advanced 67 percent this year, compared with a 9.4 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. and OpenTable Inc., or Millennial Media Inc., which offers mobile advertising, Harper said.
Representatives from Sunnyvale, California-based Yahoo and Zynga, based in San Francisco, declined to comment. Yelp, OpenTable and Millennial Media also declined to comment.