Microsoft to buy LinkedIn for Rs 1.78 lakh cr in cash

Mangalore Today News Network

New York: June 14, 2016: Microsoft Corp agreed to buy LinkedIn Corp for approximately Rs 1.78-lakh crore ($26.2 billion) in its biggest-ever cash deal.

This combines the software giant’s fast-growing cloud services business with an online network of 433 million professionals.

The offer of Rs 13,320 ($196) per share represents a premium of 49.5% to LinkedIn’s Friday closing price.

LinkedIn’s shares soared 48% to Rs 13,190 ($194) in early New York Stock Exchange trading and Microsoft’s shares were down 4%.

Chairman of LinkedIn’s board and the company’s controlling shareholder, Reid Hoffman, said the deal has his full support. “I have always had a great admiration for LinkedIn,” Microsoft CEO Satya Nadella said in a video on Microsoft’s website. “I have been talking with Reid and Jeff for a while... I have been thinking about this for a long time.”

Jeff Weiner will remain chief executive of LinkedIn, reporting to Nadella. Microsoft plans to speed up monetisation of LinkedIn by growing individual and organisation subscriptions as well as targeted advertising, it said.

Despite the rich premium paid by Microsoft, LinkedIn is selling for well below its peak of more than Rs 18,360 ($270) per share in 2015, but a weak forecast earlier this year sent its shares tumbling amid slowing online ad revenue. LinkedIn went public in 2011 at Rs 3,060 ($45).

“I think, first of all, (LinkedIn) is a great business, even though the company stubbed their toe back in February,” said Ivan Feinseth, analyst at Tigress Financial Partners. “It’s a premium company and deserves a premium valuation.”

The deal, which won the unanimous support of both boards, is expected to close this year, the companies said.