IT'S BEEN FUN
Robert Scoble may have picked the wrong day to quit Microsoft (MSFT) to go to Google (GOOG).
This just in from the newswires:
Microsoft senior management, 
in partnership with essentially every private equity shop in the world, is preparing to announce the biggest management-led buyout in history, to take the company private.
The $300 billion buyout would represent about a 7% premium to the company's closing price on March 31st, when the company's market cap closed the day at around $281 billion.
A much relieved spokesman for the Global Private Equity consortium that's come together to fund the transaction said, "We were getting really worried how we were going to put the trillions of dollars we've raised in recent months to work. Thank God for Microsoft, we can now start to make a real dent in these buckets of cash".
Bankers speaking off the record said that while the deal was almost ten times larger than the biggest management-buyout ever done ( the $32 billion RJR Nabisco LBO by KKR in 1988), Microsoft's unique financial assets potentially makes the deal doable.
"With insiders holding over 13% of the stock, $35 billion in cash last year, and over $30 billion of operating and investment cash flow per year, no major debt, and a globally dominant cash-flow rich business in PC operating systems and applications, the numbers can be made to work with a little elbow grease", said one eager senior banker really interested in closing the deal.
Shareholders also welcomed the announcement, after seeing a flattish
share price performance in MSFT shares the last few years. One
long-term shareholder remarked "I'll take a 7% premium over the current
1.30% dividend anyday; it's an exciting return, especially with Windows Vista and the new Office delayed into next year".
Both Chairman Bill Gates and CEO Steve Ballmer were enthusiastic about the prospective announcement.
A Microsoft spokesman quoted Gates as being extremely pleased with the prospects of taking the company private.
He quoted Gates saying:
"After having been public for twenty years, it'll be great to re-capture the energy of being a struggling, private company again."
"Also, this will give us a chance to really work at the Windows Vista code, get it totally right, and release it around 2009 or so, or whenever we're bloody well good and ready." said Gates, following a recent trip to the UK.
He added, "And of course it'll be a pleasure to be able to do all that without the public markets and the media hounding us day and night about the release delays".
"We may go public again sometime after that", he added.
CEO Ballmer added, "Yes, and they won't have good 'ld Steve Ballmer to kick around anymore".
Asked what this would mean in terms of Microsoft being able to hire and keep talent vs. arch-rival Google (GOOG), Gates replied, "Who wouldn't like to be a part of Microsoft doing an IPO again?"
He added, "especially after we finish developing a better MSN Search product by 2012 or so."
"We should have at least beat Ask.com by then", Gates said, referring to this week's "taste test" by the Wall Street Journal's Walt Mossberg, who rated the revamped Ask.com (IACI) as being better than Google Search.
P.S. Click here to see the story this blog published last year on this day.
Comments