YHOO blew the deal, sure, and you have to wonder what that says for its bankers?
Allen & Co. is trying to raise money for Linkedin at a whopping $1B valuation. It’s worth noting that Allen & Co. is encroaching more and more on West Coast startups, it raised $50M for Ning and Slide at monster $500M valuations.
Interestingly, Allen & Co. was not involved in the YHOO/MSFT debacle… which begs the question: what impact, if any, will advisors of that deal have?
Microsoft was represented by Morgan Stanley and Blackstone, while Lehman Bros. and Goldman represented Yahoo! Goldman can do no wrong in proprietary trading, but what about its M&A advisory unit. Say what you want about the gold standard in investment banking, but on YHOO’s representation, you can’t help but think that Goldman takes a hit, as does Lehman Bros. Maybe they could not manage YHOO nor Yang, but as someone who has closed a few deals as an advisor or executive on a management team, I can tell you that managing personalities is a major variable.
MSFT was repped by Morgan Stanley, what I find odd, so odd, is that Yahoo! Chairman Roy Bostock sits on the board of Morgan Stanley, too. I am not suggesting any impropriety but that seems too close for comfort.
Again, why on Allen & Co.? They have become the leading investment bank in media, yet no one called on their service.
You will have to pardon Allen, they were busy cashing the checks off the Slide, Ning and soon LinkedIn deals.
Now that being said, let me check my bank account before Goldman and Lehman pull some strings and cut off the water. I’m kidding, I think.
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WatchMojo NewsletterI knew Yahoo! had lost its marbles when it implemented those pricey severance package deals. Think about it, a big option for YHOO would be private equity, but any PE buyer would want to lay off 10-25% of YHOO staff to make the numbers add up.
Yet that is not really an option because it would add $1-3B to the cost of the deal. That’s something that MSFT balked at [albeit temporarily] and PE did too.
And let’s not talk about the ill-fated dalliance with Google, no wonder MSFT finds YHOO less desirable after such a deal. That is like finding out that your soon-to-be wife isn’t much of a virgin after all.
Anyway, add it all up and no wonder Yang is backtracking already and suggesting he is open to a deal.
I am glad I sold 95% of my holdings.
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