Breaking News from CNBC’s David Faber: Microsoft, Salesforce Held Significant Talks – Sources

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.

About CNBC:

With CNBC in the U.S., CNBC in Asia Pacific, CNBC in Europe, Middle East and Africa, CNBC World and CNBC HD , CNBC is the recognized world leader in business news and provides real-time financial market coverage and business information to approximately 371 million homes worldwide, including more than 100 million households in the United States and Canada. CNBC also provides daily business updates to 400 million households across China. The network's 15 live hours a day of business programming in North America (weekdays from 4:00 a.m. - 7:00 p.m. ET) is produced at CNBC's global headquarters in Englewood Cliffs, N.J., and includes reports from CNBC News bureaus worldwide. CNBC at night features a mix of new reality programming, CNBC's highly successful series produced exclusively for CNBC and a number of distinctive in-house documentaries.

CNBC also has a vast portfolio of digital products which deliver real-time financial market news and information across a variety of platforms. These include CNBC.com, the online destination for global business; CNBC PRO, the premium, integrated desktop/mobile service that provides real-time global market data and live access to CNBC global programming; and a suite of CNBC Mobile products including the CNBC Real-Time iPhone and iPad Apps.

Members of the media can receive more information about CNBC and its programming on the NBC Universal Media Village Web site at http://www.nbcumv.com/mediavillage/networks/cnbc/.