Who said that business social networking didn’t pay?
In a bid to shake up its somewhat stagnant software business and become more of a serious online player, especially when it comes to people interacting online, Microsoft Corporation (NASDAQ:MSFT) has made a $26.2 billion bid to buy business social networking site LinkedIn Corp (NYSE:LNKD).
LinkedIn has become a major resource for business recruiters and for those looking for jobs. It is also a major destination site for distribution of business news. And as such, it is a top destination site for business people looking for sector specific news and information.
Microsoft’s bid is a fairly simple and straightforward one, at $196 in cash for each LinkedIn share. LinkedIn shares closed Friday at just over $131, meaning that the acquisition is being done at a 50% premium to LinkedIn’s current share price.
The MSFT bid, however, is well below where LinkedIn was trading earlier this year. LinkedIn’s 52 week high is $258.39.
LinkedIn one-year share price graph. Source: Google Finance.
According to the Microsoft press release, LinkedIn will retain its distinct brand, culture and independence. Jeff Weiner will remain CEO of LinkedIn and will report directly to Microsoft CEO Satya Nadella.
Reid Hoffman, chairman of the board, co-founder and controlling shareholder of LinkedIn, and Jeff Weiner were reported to both fully support the transaction. The transaction is expected to close later in 2016.
Microsoft also released a video explaining the transaction: