Microsoft, Salesforce talks failed over price: Reports
23 May 2015
Microsoft Corp and Salesforce.com Inc held "significant talks" this spring but there was no agreement on a price, CNBC reported, citing people familiar with the matter.
Microsoft was ready to offer $55 billion for the world's biggest maker of online sales software as against Salesforce founder and chief executive Marc Benioff's expectation of as much as $70 billion, CNBC reported yesterday.
A potential bidder could go upto $70 billion on the high end, with Microsoft, Oracle Corp and Amazon.com Inc being the companies most likely to be suitors, according to FBR Capital Markets analyst Dan Ives' email to Reuters.
Salesforce shares were up as much as 4 per cent in afternoon trading, while Microsoft shares retreated 1 per cent.
In addition to the high asking price, Microsoft chief executive Satya Nadella was said to be reluctant on a deal of such size and the consequence of it for his company, CNBC reported.
"Salesforce is the golden jewel in the cloud, given its leadership position and stellar brand and distribution, all that would have fit well within the Microsoft ecosystem in our opinion," Ives said.
San Francisco-based Salesforce led the global customer relationship management (CRM) market, valued at $23 billion annually, according to tech research firm Gartner.
According to an earlier report by Bloomberg, Microsoft was evaluating a bid for Salesforce, after the firm was approached by another potential acquirer, but the company was not in talks with Salesforce.
Salesforce had been working with financial advisers to find potential takeover offers for it, after an approach by a potential acquirer.
The company had been working with two investment banks to determine a response to approaches, the report said.
The acquisition was expected to mark an aggressive push into cloud computing – a sector expected to have high growth potential for the buyer. According to Ives, other possible bidders for Salesforce included Oracle, IBM, Amazon and Germany's SAP, according Daniel Ives, analyst at FBR Capital Markets.
Earlier SAP had ruled itself out of the fray, with CEO Bill McDermott saying his company had "zero interest" in its software rival.