In corporate dealmaking, it’s fun to root for messes. The messy sale of Yahoo was wonderful for those us who spill digital ink for a living. And now that rascal Marc Benioff is stirring up a mess, too.
The Salesforce CEO has made no secret of being mad as heck that he lost a bidding war for LinkedIn to Microsoft and its much deeper pockets. Regulatory filings about corporate takeovers are usually deadly dull, but it is amazing to read the one describing LinkedIn’s sale process.
Benioff came back again and again to offer more money for LinkedIn. Benioff's relentless crusade forced Microsoft to pay roughly $2 billion more than it would have without such an aggressive counter-bidder. Not only that: After Microsoft announced the $26 billion acquisition in June, Benioff tried one more time. He emailed LinkedIn executives to say Salesforce could have offered even more money for LinkedIn, but Benioff felt he was bidding blind without knowing what price LinkedIn wanted. The LinkedIn board stuck with Microsoft.
Benioff isn’t done, though. Salesforce is now trying to get EU regulators to take a tough look at the Microsoft-LinkedIn tie-up, as my Bloomberg News colleagues reported this afternoon. Salesforce plans to share concerns about how Microsoft’s proposed purchase of LinkedIn -- and Microsoft's accumulation of hundreds of millions of LinkedIn user records -- “threatens the future of innovation and competition.”
Sure, complaining to Mom in Brussels makes Benioff seem like a sore loser. But as a battlefield strategy, this one is pretty good.
At worst, Benioff makes life harder for Microsoft and for LinkedIn, both of which offer software that increasingly represents serious competition for Salesforce's main product, used by business professionals to keep tabs on their customers and prospects. EU antitrust boss Margrethe Vestager is keen to keep a close watch on potential abuses of power by U.S. tech giants -- especially abuses of digital data. The Microsoft-LinkedIn deal close could be held up if she takes a hard look at Salesforce’s complaints. Uncertainty in business is bad, and even a few months' delay could be useful for Salesforce to keep its competitors off balance. LinkedIn shares took a little nosedive Thursday afternoon on the news.
The danger in Benioff's battle tactics is they highlight his growing appetite for dealmaking at Salesforce. The company has announced nine acquisitions this year with a combined deal value of $3.4 billion, according to Bloomberg data. Both those figures are Salesforce's highest yearly deal tallies since the company went public in 2004.
Salesforce also is exploring a potential purchase of Twitter. That inexplicable possible combination might cost one-third or so of Salesforce's total stock market value.
Benioff's determination to play in the tech superpower league is becoming scary to many of the company's shareholders. In a research note this week, Stifel pointed out that Salesforce shares had dropped about 15 percent from an all-time high in May, while other cloud software firms had surged ahead during the same period.
It seems unlikely the EU would spike the Microsoft-LinkedIn deal, but Benioff has nothing to lose by stirring up a little trouble for rivals. He and Salesforce also need to be careful they aren't overextending in their own corporate strategy. That would really be an ugly mess.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
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