Thursday, March 28, 2013
Acording to Dan Primack at Fortune, Dell's independent directors agreed to reimburse Blackstone the cost of its bid as part of the go-shop process. This is a real positive, and I am surprised that more sellers with go-shop provisions don't do this as a matter of course. With an incumbent bidder in place, there are real disincentives for a second bidder to make the transaction specific investments required to put together a competing bid.
This is especially true given the fact that the incumbent bidder has more time to digest the information related to the target and almost always has a matching right in place. Rational second bidders fear that they will invest resources into making a bid only to have lose it to the incumbent - or worse overpay when the incumbent walks away. (Aside, my matching rights paper is here for those who might be interested.)
By agreeing to reimburse second bidders if they enter into a go-shop process, the independent directors lower the bars to generating second bids and increase the likelihood that the go-shop will be more than just window dressing. That's a good thing. Smart counsel for independent directors will be looking at Dell and fighting hard for reimbursement provisions in future deals.
Wednesday, March 27, 2013
- Summly never had many users or any revenues. Yahoo is shutting the app down. Yahoo is saying the point of the deal is to have Summly's CEO help lead the company in mobile.
- But Summly's CEO lives in London, where he is staying to finish school
- The CEO has only promised to stay at Yahoo for the next 18 months.
- The CEO is 17-years-old. We don't buy that he's going to be able to lead or inspire adult Yahoo engineers and designers.
If that's not bad enough:
Sirer writes: "Summly licensed its core technology from SRI, which, previously, spun out Siri and sold it to Apple.
Whaddya!? Somehow, somewhere, there is arrare waste claim brewing in connection with this transaction...