Microsoft Beat Four Other Rivals To Acquire LinkedIn

EnterpriseMerger and acquisition
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SEC documents reveal four other parties, including Salesforce, wanted in on LinkedIn

Ahead of Microsoft’s $26.2 billion (£18bn) purchase of LinkedIn, documents published by the US Securities and Exchange Commission (SEC)  reveal that the enterprise social network was in conversations with four other companies regarding a possible purchase.

The document, aside from Microsoft, refers to the other bidding parties as Party A, Party B, Party C, and Party D. Party A is now known to be Salesforce, as confirmed by CEO Marc Benioff.

Party B and Party D are thought to be Google and Facebook, respectively, while Party C is rumoured to have been IBM.

Cash deal

The SEC filing reveals that Microsoft in fact did not offer the most to LinkedIn, but because of the all-cash deal, LinkedIn decided Microsoft was the best suitor. Microsoft actually increased its offer to $196 a share on June 11, up from $182 a share.

salesforceThis was after Party A, ie Salesforce, offered around $200 a share. However, this deal would have been part stock and part cash.

Microsoft’s initial proposals began in February, when CEO Satya Nadella met with LinkedIn boss Jeff Weiner.

“On February 16 2016 Jeff Weiner, LinkedIn’s chief executive, met Satya Nadella, Microsoft’s chief executive, to discuss the ongoing commercial relationship between the companies and ways to enhance it,” said the documents.

Then, throughout March, Weiner met with representatives of Party A and Party B.
But on March 15: “Mr. Weiner called Mr. Nadella to inquire as to whether Microsoft was interested in discussing further a potential acquisition of LinkedIn, and explained that, although LinkedIn was not for sale, others had expressed interest in an acquisition. Mr. Nadella responded that he would discuss the matter further with Microsoft’s board of directors.”

In the end, after months of meetings between executives from all parties, LinkedIn decided on Microsoft because the offer had “certainty of value”, while the Salesforce bid had some risks, according to the filing.

It was June 11 when a deal between Microsoft and LinkedIn was finalised, with the news announced two days later.

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