Yelp (YELP) Gains as Analyst Says Share Conversion Makes Takeover 'Easier', 'More Likely'

(Updated - September 26, 2016 10:19 AM EDT)

Yelp (NYSE: YELP) is up 1.4% early Monday after Cantor Fitzgerald Youssef Squali suggested the conversion of Class B super-voting shares into regular Class A makes the company "an easier, and more likely take-out target."

Squali notes that previously, with B shares having 10x the voting rights of A shares, B shares holders controlled over 50% of the aggregate voting power. Now those same holders control less than 10% of the vote.

The analyst highlighted Facebook (NASDAQ: FB), Priceline (NASDAQ: PCLN), TripAdvisor (NASDAQ: TRIP) and Microsoft (NASDAQ: MSFT) as potential acquirers. The analyst said ill will between Alphabet (Google) (NASDAQ: GOOGL) and Yelp, developed over the years, is unlikely to lead to a transaction between the two.

The analyst said the stock may be worth $53/share in a deal, using the sale of LinkedIn as a proxy. This suggests a 34% premium from current levels.

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