Which companies were bidding against Microsoft to acquire LinkedIn?

echojason@gmail.com'

JASON LEMKIN

MSFT paid a 50% premium to the stock price to buy LinkedIn. A 50% premium suggests to me (x) no one really, but (y) other A-tier folks were genuinely kicking the tires.

A 30% premium is fairly common for public cos., even with no other bidders. You usually have to pay some material premium to get all the shareholders to agree:

50% is high, but at the high end of normal. If you really want a deal, and believe others may bid … 50% isn’t that uncommon.

Similarly, Salesforce paid a >50% premium for Demandware. They claimed the deal was competitive, but my guess is it was competi-tire kicked. Someone else could pay 60% if they really wanted to:

Multiple real bidders can easily drive a premium higher than 50% if everyone is well capitalized and really wants the asset.

View original question on quora

Published on June 13, 2016
Share This