Was Salesforce Eyeing LinkedIn Before Microsoft Scooped It?
Zacks Investment Research | Jun 16, 2016 09:50PM ET
It is now becoming clear why Microsoft Corporation (NASDAQ:MSFT) paid such a hefty price to acquire LinkedIn Corporation (NYSE:LNKD) . According to a report published by Bloomberg yesterday, salesforce.com Inc. (NYSE:CRM) was also interested in buying LinkedIn Corporation (LNKD), which led to Microsoft making one of its costliest acquisitions so far.
Later in an interview with technology publication Recode, the Chief Executive Officer of Salesforce, Marc Benioff, confirmed that it was in talks with LinkedIn for a potential takeover.
Citing people familiar with the matter, Bloomberg revealed that The Goldman Sachs Group Inc. (NYSE:GS) was advising Salesforce during the negotiations. The transaction, if it had materialized, would possibly have involved stock and debt financing. However, Microsoft stepped in with a lucrative all-cash offer of $26.2 billion, which was too good for LinkedIn to turn down.
Most importantly, however, citing people familiar with the matter,Bloomberg reported that Microsoft was not the one to contact LinkedIn’s management for the buyout. Instead, it was the professional networking behemoth’s Chairman Reid Hoffman and CEO Jeff Weiner who directly informed Microsoft's CEO Satya Nadella “that they were proceeding with a sale process that had led them to hire bankers and contact other potential buyers”.
Challenges Ahead for Salesforce
The lost acquisition opportunity may have a negative impact on Salesforce over the long run. As per Bloomberg, Salesforce, which is currently the market leading customer relationship management (CRM) platform provider, had expected the LinkedIn acquisition to provide it access to “vast trove of data on workers around the world to bolster tools that help customers close sales deals”.
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