Facebook could pay over $1 billion for Opera: analysts

(Reuters) – Opera Software shares soared over 20 percent on Tuesday on talk Facebook Inc. was in discussion to buy the firm, while analysts said competition from Google and others could push the price tag of any deal over $1 billion.

Shares of Oslo-listed Opera, coveted for its advanced mobile phone software technology, jumped as much as 26 percent, valuing the firm at over $800 million.

Opera’s mobile technology, along with 170 million Opera Mini users, give the firm extensive commercial relationships with mobile phone manufacturers and operators.

Facebook has struggled to convert its rapidly increasing traffic from mobile platforms to revenue, and purchasing Opera would be a faster solution than building its own platform or browser, analysts added.

"Opera would be sensible for Facebook on several levels as it would enhance the now limited mobile experience of Facebook, improve Facebook’s mobile monetization problem, help Facebook retain online game developers leaving the social network over a lacking
mobile platform and further improve Facebook’s ability to target ads," Arctic Securities said.

It would be such a perfect fit for Facebook, analysts said it would have to pay a hefty premium.

DNB, Norway’s top bank, said the price would have to be double Friday’s closing level, or 68.6 crowns, valuing the firm at $1.35 billion, while Danske Bank predicted a price between 50 and 60 crowns a share, or between $1 billion and $1.2 billion.

At 1021 GMT, the stock traded up 16.9 percent at 40.1 crowns a share, valuing the firm at around $800 million.

Opera officials have repeatedly declined to comment.

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Posted by Awais Khan on May 29 2012. Filed under Business, Sci-Tech. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry