George Anders of Forbes.com writes about why Bloomberg LP won’t buy LinkedIn despite some interest from some within the company.
Anders writes, “For about $20,000 a year, bond traders and other finance professionals can rent a Bloomberg terminal that pumps all sorts of astonishing market data and insights into their workspace, with second-by-second updates. For $8,000 or so a year, serious players in the corporate hiring world can sign up for LinkedIn’s Recruiter, which lets them sort through LinkedIn’s treasure trove of resumes, particularly successful people who aren’t looking for jobs but might be open to an amazing offer. As I noted in a FORBES cover story about LinkedIn a few months ago, Recruiter and the Bloomberg terminal belong in the same sentence.
“But it takes a lot more than one similar product to make for a sensible acquisition. Even though LinkedIn’s stock rose nearly 2% Monday in a flat market, to $111.74, investors hardly seem to be treating this speculation as a likely prospect. And they shouldn’t. Here are three reasons why Bloomberg’s deal team should let this brief fantasy fade from sight.
“1. LinkedIn is too expensive. At last Friday’s closing price of $109.70, LinkedIn had a market capitalization of nearly $12 billion — and that’s before any takeover premium. Carrying out an all-cash acquisition would require uncomfortably large borrowings, even for Bloomberg L.P., which is a money-making machine that could be valued at $30 billion or more.
“Issuing stock would create even gnarlier problems. LinkedIn investors would have trouble with Bloomberg L.P.’s privately held shares, which can’t easily be traded. And there’s nothing in the financial-data company’s history so far that suggests Michael Bloomberg would ever want to dilute his ownership of the business or go public.”
Read more here.
