What Does MSFT/YHOO Debacle Mean for Their Bankers?

Yahoo (YHOO) blew the deal, sure, and you have to wonder what that says for its bankers?

Allen & Co. is trying to raise money for Linkedin at a whopping $1B valuation.  It’s worth noting that Allen & Co. is encroaching more and more on West Coast startups - it raised $50M for Ning and Slide at monster $500M valuations.

Interestingly, Allen & Co. was not involved in the YHOO/MSFT debacle… which begs the question: what impact, if any, will advisors of that deal have?

Microsoft (MSFT) was represented by Morgan Stanley (MS) and Blackstone (BX), while Lehman Bros. (LEH) and Goldman Sachs (GS) represented Yahoo! Goldman can do no wrong in proprietary trading, but what about its M&A advisory unit?  Say what you want about the gold standard in investment banking, but on YHOO’s representation, you can’t help but think that Goldman takes a hit, as does Lehman Bros.  Maybe they could not manage YHOO or Yang, but as someone who has closed a few deals as an advisor or executive on a management team, I can tell you that managing personalities is a major variable.

MSFT was repped by Morgan Stanley, what I find odd, so odd, is that Yahoo! Chairman Roy Bostock sits on the board of Morgan Stanley, too.  I am not suggesting any ,but that seems too close for comfort.

Again, why on Allen & Co.?  They have become the leading investment bank in media, yet no one called on their service.

You will have to pardon Allen, it was busy cashing the checks off the Slide, Ning and soon LinkedIn deals.

Now that being said, let me check my bank account before Goldman and Lehman pull some strings and cut off the water.  I’m kidding, I think.

Comments

[User 190190]

Allen & Co. is a "boutique" focusing on younger companies, hence the strong rep in private placements. They have put together quite a strong business with emerging digital media, but they aren't always on the mega M&A deals like Goldman, Morgan. That's as much a function of their size. The bulge brackets have more resources to throw at a deal like this, plus i know that Morgan has had a tight relationship with MSFT for a while. Although Allen has been particularly close to News Corp and worked on the WSJ acquisition. It usually comes down to relationship.

2008 May 07 02:09 PM