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The tick-tock story of how LinkedIn shopped itself to Microsoft, Salesforce and Google

How the $26 billion deal went down.

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Most Securities and Exchange Commission filings are dry affairs. LinkedIn’s latest, a proxy statement that details its acquisition by Microsoft and the interest of four other suitors, is a lively one!

Paperwork after mergers and acquisitions do tend to be lively — particularly ones, like this, involving two public companies, as the seller wants to show investors they negotiated the best price.

LinkedIn’s does that in some detail. While Microsoft didn’t bid the most, its cash-only offering won out. The filing does not name the losing bidders, but refers to a particularly aggressive one as “Party A.”

Salesforce CEO Marc Benioff previously told Recode that he gave LinkedIn — which sold for $26 billion — a serious look. And as Recode reported, Party A was Salesforce and the other potential suitors — Party B and Party D — were Google and Facebook, respectively. We do not yet know who Party C is.

Here, courtesy of LinkedIn’s filing, is the play-by-play of the corporate courtship, detailing how LinkedIn’s senior leadership, namely its founder and board chair Reid Hoffman, upped the price by $30 a share.

  • February 16: Jeff Weiner, LinkedIn’s CEO, meets Microsoft CEO Satya Nadella to chat. “The concept of a business combination was raised,” reads the filing.
  • March 10: An exec from “Party A” asks to meet with Weiner. They do. And, funny enough, the Salesforce exec raises the same concept as Nadella.
  • Four days later, Weiner and Party A exec both attend a “function” and talk about this some more.
  • Later that day, an exec from Party B (hello, Google!) has a scheduled meeting with Weiner. After that, this exec dials up Weiner and Hoffman about meeting to discuss Google potentially acquiring LinkedIn.
  • March 15, the next day: Weiner calls Nadella and “explained that, although LinkedIn was not for sale, others had expressed interest in an acquisition.” Nice one, Jeff.
  • March 16: Weiner meets with Benioff, who tells Weiner that Salesforce has hired a financial adviser and is ready to buy.
  • Later that day: Nadella calls Weiner and says, “Us too!”
  • March 18: LinkedIn’s board meets and decides to form a committee to debate the potential acquisition. Weiner also meets with Qatalyst Partners, a bank that specializes in deals, and invites them to serve as advisers.
  • March 22: Qatalyst Partners suggests that Weiner chat with a different company, Party C.
  • March 25: He does.
  • March 25: He also goes back to talk with Salesforce about not just the acquisition but the potential for Hoffman of sitting on its board.
  • March 29: Another Google chat.
  • March 31: Another chat with Nadella, this time in person.
  • April 1: Hoffman tells the board committee he has a meeting scheduled with another company, Party D (Facebook), which, sure, might be interested too.
  • April 2: Party C backs out.
  • April 4: A Google exec tells Weiner that they’re in, with the corporate development team starting the process.
  • April 7: Hoffman meets with Facebook CEO Mark Zuckerberg and floats an acquisition. Hoffman is turned down.
  • April 11: LinkedIn’s managers and advisers hold a due diligence call with Microsoft’s managers and advisers and legal counsel.
  • April 12: LinkedIn does the same with Salesforce.
  • April 14: Same with Google.
  • April 25: Salesforce submits an offer of $160 to $165 per share of LinkedIn common stock. Several days of discussion follow.
  • May 3: Google bows out, but leaves open the possibility of a “commercial partnership.”
  • May 4: Microsoft submits its offer of $160 per share in cash.
  • May 6: LinkedIn’s board meets, authorizing the committee to continue looking into the offers from Microsoft and Party A. The committee then tells the advisers to go to each suitor with a $200-per-share offer.
  • May 9: Hoffman meets with Bill Gates, Microsoft’s co-founder. The pair discuss the “business rationale and potential benefits” of an acquisition and whether Hoffman could serve on Microsoft’s board. Hoffman also chats with Nadella.
  • Later that day: Salesforce comes back with a $171 a share offer, half in cash and half in stock.
  • May 11: Microsoft counters with $172 per share.
  • May 12: Offers are weighed! LinkedIn’s top brass meets with the board committee and advisers, landing a decision to ask Microsoft and Salesforce to come back with their best offers the following day, ahead of the board meeting. Hoffman tells the committee he would get behind a deal from Microsoft of $185 a share or better.
  • May 13: Hoffman tells Nadella this.
  • Later that day: Microsoft puts offer at $182 a share, still in cash. Salesforce offers $182, with $85 in cash and the rest in stock. Both ask that LinkedIn negotiate on an “exclusive basis.”
  • Still later that day! “The LinkedIn Board discussed the two proposals and unanimously concluded to proceed with exclusivity with Microsoft.” Qatalyst Partners tells Salesforce that LinkedIn went with someone else, so sorry.
  • May 20: LinkedIn’s lawyers send Microsoft a draft of the merger document.
  • Later that day: Salesforce comes back! They up the offer to $188 a share, although it’s tied to Salesforce’s stock price.
  • May 21: LinkedIn’s top brass and committee meet again, weighing Salesforce’s offer vis-a-vis its stock price. They also float the idea of keeping talks with Microsoft going long enough past their contract’s expiration date, if Salesforce was still interested.
  • June 1: LinkedIn and Microsoft lawyers etch out more of the merger paperwork, including a termination fee.
  • Later that day: Hoffman “informed the Company that he would not be prepared to enter into the support agreement with Microsoft in light of the potential risk that doing so could, under LinkedIn’s certificate of incorporation, potentially result in the automatic conversion of his Class B common stock to Class A common stock.”
  • June 5: Salesforce comes back with another offer, the same mix of cash and stock, but this one with a notional value of $200 a share.
  • June 6: LinkedIn’s committee recommends that its leadership not respond to Salesforce, but “encourage Microsoft” to get closer to $200 a share.
  • Same day: Qatalyst Partners talks to the bankers, Morgan Stanley, about the $200-per-share offer. Hoffman is now on board with this offer.
  • June 7 and 8: Weiner and Hoffman each chat (separately) with Nadella, telling him the $182 offer just isn’t good enough, but that they are open to a $200-per-share offer in cash. Sure, Nadella says, but we need to find “cost synergies” with that price. Microsoft’s executives call LinkedIn executives to discuss said “cost synergies.”
  • June 9: Nadella meets with Weiner to discuss these cost synergies. The LinkedIn CEO “reiterated that $182 was no longer supportable.”
  • June 10: Microsoft comes back with $190 a share.
  • Later that day: LinkedIn’s board authorizes Weiner to go back and ask for more, suggesting that $196 would be okay.
  • June 11: “Early in the morning,” the lawyers and advisers re-draft the merger agreement, inserting a termination fee of $700 million.
  • Later that morning: Nadella tells Weiner that Microsoft’s board approved the $196-per-share price tag and wants to finalize the deal “later that day.”
  • Later that day: LinkedIn’s board meets. All in favor? Ayes all around.

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