Feb 5, 2008 - Morgan Stanley and alternatives investor The Blackstone Group were picked up by Microsoft to advise on $44.6bn bid for Internet search provider Yahoo! This would be the largest technology takeover in history.
Neither Morgan Stanley nor Blackstone had done much deal-advisory business with Microsoft before. In fact, out of Microsoft’s five biggest deals, only one firm advised the company more than once: Goldman Sachs. The I-Bank advised Microsoft on its failed bid for Yahoo last year.
But this time, Goldman is representing Yahoo in its potential defense, along with Lehman Brothers. Goldman previously advised Yahoo in its biggest-ever deal, the $6.62 billion purchase of Broadcast.com.
Morgan Stanley, which suffered losses of $10.6bn from the credit crunch and collapse of subprime mortgages in America, is expecting $150m if Microsoft is successful. Leading the Morgan Stanley team is global head of mergers Paul Taubman, a media and telecommunications specialist who advised media group Time Warner on its ill-fated $164 billion merger with Internet services provider America Online at the height of 2000 dotcom boom.
Blackstone, which began as a mergers advisory shop, is lead banker on the deal, Jill Greenthal, advised Yahoo in her previous job at Credit Suisse, for $1.45 billion purchase of Overture Services in 2003.
Morgan Stanley is well versed in tech deal-making; last year, it and Credit Suisse essentially tied for second place in Dealogic’s league tables measuring advisory work on global tech mergers; each had a market share of nearly 15 percent by volume.
However in M&A advisory, it's always good to be on the sell side, because you're guaranteed your fee: if Microsoft fails to win Yahoo for whatever reason, Morgan Stanley and Blackstone are likely to go home largely empty-handed, while Goldman and Lehman will still be paid.
The proposed deal will be one of the biggest for years, although analysts warned it was unlikely to spark a rush of M&A activity.
Neither Morgan Stanley nor Blackstone had done much deal-advisory business with Microsoft before. In fact, out of Microsoft’s five biggest deals, only one firm advised the company more than once: Goldman Sachs. The I-Bank advised Microsoft on its failed bid for Yahoo last year.
But this time, Goldman is representing Yahoo in its potential defense, along with Lehman Brothers. Goldman previously advised Yahoo in its biggest-ever deal, the $6.62 billion purchase of Broadcast.com.
Morgan Stanley, which suffered losses of $10.6bn from the credit crunch and collapse of subprime mortgages in America, is expecting $150m if Microsoft is successful. Leading the Morgan Stanley team is global head of mergers Paul Taubman, a media and telecommunications specialist who advised media group Time Warner on its ill-fated $164 billion merger with Internet services provider America Online at the height of 2000 dotcom boom.
Blackstone, which began as a mergers advisory shop, is lead banker on the deal, Jill Greenthal, advised Yahoo in her previous job at Credit Suisse, for $1.45 billion purchase of Overture Services in 2003.
Morgan Stanley is well versed in tech deal-making; last year, it and Credit Suisse essentially tied for second place in Dealogic’s league tables measuring advisory work on global tech mergers; each had a market share of nearly 15 percent by volume.
However in M&A advisory, it's always good to be on the sell side, because you're guaranteed your fee: if Microsoft fails to win Yahoo for whatever reason, Morgan Stanley and Blackstone are likely to go home largely empty-handed, while Goldman and Lehman will still be paid.
The proposed deal will be one of the biggest for years, although analysts warned it was unlikely to spark a rush of M&A activity.
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