In the absence of any news on the Microsoft-Yahoo front, it’s time to ask some nuts and bolts questions. Such as: How exactly does a tender offer work? How about a proxy fight? If either one of these occur during the MSFT- YHOO tussle, what kind of timeline are we looking at?
Entrepreneur Marc Andreessen does the work that paid journalists haven’t at Pmarca. It’s a great read. Perhaps most interesting is Marc’s conclusion, which makes a point that in retrospect is blindingly obvious — so much so that no one’s made it yet: The tech world, which has been largely free of hostile takeovers so far, is going to be seeing many more of these.
Historically hostile takeovers practically never happened in technology. Potential hostile acquirors assumed that hostile takeovers wouldn’t work because the target company’s employees would bail and the target company’s business would collapse.
It turns out that as technology companies become larger and more mature, acquirors are becoming increasingly convinced that neither of these assumptions hold. Perhaps employees of large tech companies aren’t that bonded to current management, and perhaps many of them would actually prefer to work for a larger, more dominant combined company. And maybe as a consequence, the target’s business would do just fine in the wake of a hostile takeover — in fact, maybe it would do better, due to advantages of combined size and scale.
My bet is that hostile takeovers, particularly of larger and more mature companies, are going to become increasingly common in our industry.
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