3 ms·

What I don't understand is this: who has the power to decide such things? In this story it seems like there are two entities who can block each other. Why didn'

by jan_g 16y ago

What I don't understand is this: who has the power to decide such things? In this story it seems like there are two entities who can block each other. Why didn't someone decide for Yahoo, if their offer was so much better? It's in the interest of the shareholders.

staunch 16y ago
There's probably a legal agreement at Yelp that specifies what percentage of stockholders must agree in order to sell. It's unlikely the investors have enough equity to force a sale. That's irrelevant though. Even if it was possible Yahoo would not purchase Yelp if all the key employees where vehemently opposed.
- jan_g 16y ago
  So, if one smaller part of shareholders couldn't force a sale to Yahoo, then why larger part of shareholders couldn't force a sale to Google? As I understand, management was all for Google.
  - deleted 16y ago
    [deleted]
  - staunch 16y ago
    The board of directors at Yelp has representatives from both the management and the investors. The board probably needs a majority (or unanimous) consent in order to sell.
bambax 16y ago
Well if the management team won't work for Yahoo, then it's doubtful the Yahoo offer would stand; therefore there is no Yahoo offer and they should have taken the Google offer. It's not clear why they even considered the Yahoo offer if it was in fact impossible for Yahoo to go ahead.
- michael_dorfman 16y ago
  They have a fiduciary responsibility to consider the offer, and as the offer was significantly higher than the Google offer, they'd also have a fiduciary responsibility to pursue the offer, even when obstacles (such as management resistance) arise.
  - zumda 16y ago
    I think the point he was trying to make is that the offer from Yahoo only will go through if Yelp brings their team with them. If the management bails, Yahoo won't buy Yelp. This is pretty common, since it is an easy way to get talent into the company without all the recruiting.
    - michael_dorfman 16y ago
      I understand that. The point I am making as that Yelp was obligated to consider the offer (even if it ultimately was doomed). In this case, that caused Google to bail, and Yelp was screwed-- but not because their board screwed up. The board only did what they had to do.
      - bambax 16y ago
        But as part of their diligence to consider the Yahoo offer, could they not have come to a conclusion such as this one: "given the fact that the management won't go, and that Yahoo won't buy Yelp without a management team, it follows that the Yahoo offer is void and nonexistent. So, let's pursue the Google offer"...? If for example I offered 3 trillion dollars for Yelp, would the board consider my offer (as opposed to laughing it off)? I guess my question is, What is the "reality threshold" of an offer?

by jan_g 16y ago

staunch 16y ago

There's probably a legal agreement at Yelp that specifies what percentage of stockholders must agree in order to sell. It's unlikely the investors have enough equity to force a sale. That's irrelevant though. Even if it was possible Yahoo would not purchase Yelp if all the key employees where vehemently opposed.

jan_g 16y ago
So, if one smaller part of shareholders couldn't force a sale to Yahoo, then why larger part of shareholders couldn't force a sale to Google? As I understand, management was all for Google.
- deleted 16y ago
  [deleted]
- staunch 16y ago
  The board of directors at Yelp has representatives from both the management and the investors. The board probably needs a majority (or unanimous) consent in order to sell.

bambax 16y ago

Well if the management team won't work for Yahoo, then it's doubtful the Yahoo offer would stand; therefore there is no Yahoo offer and they should have taken the Google offer. It's not clear why they even considered the Yahoo offer if it was in fact impossible for Yahoo to go ahead.

michael_dorfman 16y ago
They have a fiduciary responsibility to consider the offer, and as the offer was significantly higher than the Google offer, they'd also have a fiduciary responsibility to pursue the offer, even when obstacles (such as management resistance) arise.
- zumda 16y ago
  I think the point he was trying to make is that the offer from Yahoo only will go through if Yelp brings their team with them. If the management bails, Yahoo won't buy Yelp. This is pretty common, since it is an easy way to get talent into the company without all the recruiting.
  - michael_dorfman 16y ago
    I understand that. The point I am making as that Yelp was obligated to consider the offer (even if it ultimately was doomed). In this case, that caused Google to bail, and Yelp was screwed-- but not because their board screwed up. The board only did what they had to do.
    - bambax 16y ago
      But as part of their diligence to consider the Yahoo offer, could they not have come to a conclusion such as this one: "given the fact that the management won't go, and that Yahoo won't buy Yelp without a management team, it follows that the Yahoo offer is void and nonexistent. So, let's pursue the Google offer"...? If for example I offered 3 trillion dollars for Yelp, would the board consider my offer (as opposed to laughing it off)? I guess my question is, What is the "reality threshold" of an offer?