WHEN: Today, Friday, May 22nd
WHERE: CNBC's "Power Lunch"
Following is the unofficial transcript of breaking news from CNBC's David Faber. Following is a link to the video from CNBC.com: http://video.cnbc.com/gallery/?video=3000382363.
All references must be sourced to CNBC.
DAVID FABER: THERE HAS BEEN A GREAT DEAL OF NOISE AROUND SHARES OF SALESFORCE.COM GIVEN MANY REPORTS ABOUT A POTENTIAL – OR AT LEAST TALKS INVOLVING THE COMPANY OR NON-TALKS. WE WANTED TO COME BACK TO PEOPLE AND GIVE THEM A SENSE AS TO WHAT EXACTLY TOOK PLACE. MICROSOFT AND SALESFORCE.COM DID HAVE SIGNIFICANT TALKS EARLIER THIS SPRING ABOUT A PURCHASE OF SALESFORCE BY MICROSOFT, ACCORDING TO A NUMBER OF PEOPLE FAMILIAR WITH THE SITUATION. WHILE THE TWO SIDES DID FAIL TO REACH A DEAL AND HAVE NOT REENGAGED, THE TALKS ADVANCED TO A LEVEL OF DETAIL THAT INDICATES THEY WERE SERIOUS. ULTIMATELY THE TWO COMPANIES REMAIN FAR APART ON PRICE. MY SOURCES TELLING ME THAT MICROSOFT WAS SAID TO BE WILLING TO OFFER ROUGHLY $55 BILLION FOR THE COMPANY WHILE ITS FOUNDER & CEO MARC BENIOFF SAID TO HAVE KEPT RAISING HIS PRICE EXPECTATIONS AND MAY HAVE GOTTEN AS HIGH AS $70 BILLION. HENCE, A VERY LARGE GAP. BY THE WAY, AT $55 BILLION, IT STILL WOULD HAVE REPRESENTED THE LARGEST SOFTWARE DEAL OF ALL TIME. NOW THE DEAL DID ENVISION MICROSOFT USING OF COURSE A SIGNIFICANT PORTION ITS $95 BILLION IN CASH TO PAY FOR SALESFORCE, THOUGH THERE WAS SOME DISCUSSION OF ALLOWING BENIOFF TO ROLL HIS 5.7% STAKE IN SALESFORCE INTO MICROSOFT STOCK. VERY MUCH UNCLEAR WHETHER THEY GOT TO THE FINISH LINE – THAT WOULD HAVE BEEN SOMETHING THAT WOULD HAVE BEEN APART OF THE DEAL. BENIOFF WOULD HAVE HAD A MANAGEMENT ROLE AT MICROSOFT AT LEAST UNDER THE TERMS THAT WERE BEING NEGOTIATED, ACCORDING TO PEOPLE CLOSE TO THE TALKS. SALESFORCE WAS ENGULFED IN TAKE OVER RUMORS LATE LAST MONTH. THAT IS WHEN BLOOMBERG REPORTED ON AN APPROACH OF AN UNNAMED SUITOR THAT WAS NOT MICROSOFT FOR THE COMPANY. BLOOMBERG ALSO REPORTING ON MAY 5th THAT MICROSOFT WAS EVALUATING A BID FOR SALESFORCE, BUT SAID THEN THAT NO TALKS BETWEEN THE TWO COMPANIES WERE TAKING PLACE. BOTH REPORTS SENT SHARES OF SALESFORCE SHARPLY HIGHER. NOW THE TALKS THAT DID IN FACT TAKE PLACE BETWEEN THE TWO COMPANIES CONCLUDED IN EARLY OR BY EARLY MAY. AND THEY ARE NOT EXPECTED TO REEMERGE ANY TIME SOON. IN ADDITION TO A DISPARITY IN PRICE EXPECTATIONS, THERE WAS ALSO A SENSE THAT MICROSOFT'S CEO SATYA NADELLA, WHO HAS BEEN IN THE JOB FOR ONLY ABOUT 18 MONTHS, MIGHT BE RELUCTANT TO PULL THE TRIGGER ON A DEAL OF SUCH SIZE AND CONSEQUENCE FOR HIS COMPANY. STILL, A NUMBER OF PEOPLE CLOSE TO THE TALKS BELIEVE THAT THEY HAD MOMENTUM, SERIOUS MOMENTUM, AND THINK THEY MIGHT HAVE ACTUALLY BEEN ABLE TO REACH A DEAL UNTIL PRICE, OF COURSE, BECAME A DEFINING ROADBLOCK AS IT OFTEN CAN BE IN DEAL TALKS OF THIS NATURE. SALESFORCE, WHICH HAS A LEADING POSITION IN CUSTOMER RELATIONSHIP MANAGEMENT SOFTWARE AND CLOUD COMPUTING, IS THOUGHT TO BE A GOOD FIT FOR MICROSOFT, WHICH IS FOCUSED ON GAINING SCALE IN BOTH THOSE BUSINESSES. MICROSOFT DECLINED TO COMMENT THROUGH A SPOKESMAN, AND A SALESFORCE SPOKESPERSON HAS NOT RETURNED CALLS. SO, A BIT MORE CLARITY ON A LOT OF DIFFERENT REPORTING THAT TOOK PLACE INVOLVING SALESFORCE, WHICH BY THE WAY, A FEW DAYS AGO REPORTED VERY STRONG NUMBERS SENDING ITS STOCK PRICE RIGHT BACK UP TO THE LEVELS IT INHABITED WHEN MANY OF THESE REPORTS WERE FIRST EMERGING.
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