Bidding From Salesforce Pushed Microsoft to Raise Its Offer for LinkedIn

Salesforce.com Inc. auction persistent forced Microsoft Corp. to increase its offer by LinkedIn Corp. 22%, or about $ 5 billion over the two months of negotiations, according to a regulatory filing by the professional social network and a person with knowledge of the matter.

The software giant has finally agreed to buy LinkedIn past to $ 26.2 billion, or $ 196 per share in cash month. This was a 50% premium over the share price of LinkedIn before the announcement of the transaction.

A Securities and Exchange Commission filing Friday revealed that Microsoft presented LinkedIn on May 4, a non-binding indication of interest for the acquisition of LinkedIn at $ 160 per share in cash. Nine days earlier, another company, described by LinkedIn as "Part A", filed its own non-binding indication of interest to buy the company for $ 160 to $ 165 per share in cash and stock mix.

The Wall Street Journal and other publications previously reported Salesforce was the second bidder on LinkedIn. The person familiar with the Salesforce confirmed is the part A.

Salesforce offering pressured Microsoft to raise its offer several times. Even after LinkedIn entered into an agreement to negotiate exclusively with Microsoft, Salesforce has continued to push its bid. And as its stock price soared, the value of its offer has also grown, LinkedIn executives rely on Microsoft for more money.

LinkedIn also revealed that a third company, which describes only as "Part B" has also signed a confidentiality agreement when considering the purchase of the company after his bronze head LinkedIn Jeff Weiner Executive LinkedIn and majority shareholder and chairman Reid Hoffman met. As the first offers rolled in early May, Part B is removed without bidding, saying he was only interested in a team with LinkedIn.

After Microsoft and Salesforce have submitted their initial bids on May 6, LinkedIn has notified the companies that enter into exclusive negotiations with any bidder if it raised its offer to $ 200 per share. Neither company has. This started a bidding war that forced Microsoft to keep pace with the increasing price of shares of Salesforce.com, ultimately leading to earn generous offer from Microsoft.

Three days later, Hoffman met with Bill Gates, Microsoft co-founder and director of the company, on a date that was already planned. The pair discussed "potential benefits to potentially acquire Microsoft LinkedIn" according to the ranking. They also discussed the possible participation of Mr. Hoffman after an acquisition, "which includes, among other things, can serve your management board microsoft".

The same week, Salesforce has revised its offer to $ 171 per share in cash and stock, while Microsoft raised its offer to $ 172 per share in cash. Both bidders said they preferred not to participate in an auction, but they wanted LinkedIn to advise an acceptable price.

On May 12, LinkedIn said the two companies to submit "best and final offer" by the afternoon the next day. Hoffman called Microsoft CEO Satya Nadella said he "personally would support" an offer from Microsoft $ 185 per share or more if the board LinkedIn select Microsoft as the winning bidder.

On May 13, Microsoft offered $ 182 per share in cash, but offered to make an offer in cash and shares, if LinkedIn is preferred. Salesforce offered $ 182 per share, which includes $ 85 per share in cash and the rest in shares. Both proposals have called LinkedIn negotiate exclusively.

Later that day, the LinkedIn directory has chosen Microsoft's offer and one day later entered into an exclusive agreement with the company.

This has not prevented Salesforce, however. During the next month, as LinkedIn and agreement hammered Microsoft, Salesforce has submitted revised proposals. The offers are not radically different. But escalating stock prices Salesforce has boosted the value of its global offering. However, LinkedIn has determined that it could not respond to the offer of Salesforce because of the exclusivity agreement.

On June 5, Salesforce tried again, increasing the number of shares in its offer of cash and shares, for a total value of $ 200 per share. LinkedIn did not respond. But the company said Mr. Nadella 7th June and again on June 8 to $ 182 per share offer Microsoft "was more bearable" and encouraged Microsoft to increase its offering of $ 200 per share.

At that time, Mr. Weiner Nadella said that companies would have to discuss "cost synergies in the operation" Microsoft to increase its offer. This led to CFO Steven Sordello send LinkedIn Amy Hood, his counterpart at Microsoft, "an analysis of the potential cost synergies resulting from the combination," the statement said. The presentation did not reveal what these cost synergies.

That was enough to convince Microsoft on June 10 to raise its offer again, this time to $ 190 per share in cash. Later that day, Mr. Weiner told Mr. Nadella that the council would support a bid for $ 196 per share in cash. On Saturday June 11, Mr. Nadella accepted, and the companies have signed an agreement. The companies announced the news two days later, before the opening of the market.