Salesforce Forces Microsoft To Pay $8B Extra For LinkedIn
Microsoft who dropped over A$9.6 Billion buying Nokia, has been forced to pay over A$8B to buy LinkedIn, a Company that that like Nokia was struggling to grow revenues.
After the Nokia debacle Microsoft was forced to axe over 8500 jobs.
It now appears that a bidding war with Salesforce.com forced Microsoft to pay A$34Billion for LinkedIn in a desperate effort to seal its planned takeover of the online B2B portal.
Like Nokia, LinkedIn was struggling to grow their business and it is still not clear how Microsoft will integrate LinkedIn into their Office 365 or Skype business or how they intend to make money from the venture.
In Australia online jobs portal Seek could face competition in the recruitment market if LinkedIn is turned into a global jobs and contact portal that sits inside a subscription to Office 365.
The latest contest eventually led Salesforce to offer A$650Mm more than Microsoft, at least on paper, though its cash-and-stock offer was heavily dependent on its own share price, in contrast to the all-cash bid from the software company.
The all-cash Microsoft deal was the third-largest acquisition in the tech industry.
A recent filing with the Securities and Exchange commission indicates that there were up to five companies in total all vying for LinkedIn. One was definitely Salesforce, and that probably gave Microsoft the biggest competition for the purchase.
They both entered into a bidding war for LinkedIn fairly early on in the discussions, jumping from a price of around US$160 per share to Salesforce’s final offer, US$85 in cash and a portion of Salesforce stock that worked out to just around $200 per share. Microsoft ended up winning with its bid of US$196 per share, straight cash.
Facebook is also rumoured to be one of the parties that was interested in LinkedIn.
It’s unclear if Facebook even managed to make a bid, but the company ultimately dropped out of talks around April—likely due to the worry that the cost for LinkedIn would be too great. (And it only took around six days for the potential acquisition to go from the “let’s chat about it” to the “Zuckerberg says no” stage.)