Microsoft Has Acquisition Deal With Nvidia
- Thread starter fellix
- Start date
And can nv say to ms actually we want to sell to the other guys or must they sell to ms if the price is matched ?
but the article doesnt explain whats in the contract, and it doest make sense
"The deal gives Microsoft the exclusive right to match any offer for 30% or more of Nvidia's outstanding shares by a third-party"
that means if someone offers 1billion ms can offer 1billion, but for example I or another company cannot also offer 1billion, how can nv create a contract that says I cannot make them an offer
thats nonsense
"oi nv i'll give you £5 for 30% of your shares", thats that clause buggered
And isnt common stock shares held by people how can nv give ms permission to tell me that i cannot sell my shares (if I had any)
"The deal gives Microsoft the exclusive right to match any offer for 30% or more of Nvidia's outstanding shares by a third-party"
that means if someone offers 1billion ms can offer 1billion, but for example I or another company cannot also offer 1billion, how can nv create a contract that says I cannot make them an offer
thats nonsense
"oi nv i'll give you £5 for 30% of your shares", thats that clause buggered
And isnt common stock shares held by people how can nv give ms permission to tell me that i cannot sell my shares (if I had any)
Bouncing Zabaglione Bros.
Legend
It sounds more like that in the event of someone wanting to take a massive stake (ie controlling interest) in Nvidia (ie a buyout), then MS would have first refusal to match that offer. That makes sense when you consider what Nvidia was supplying to MS with the first Xbox, but it seems unlikely now that MS would exercise that option. MS seems to have moved away from the Nvidia Xbox contract where Nvidia did the design, manufacture and got to keep patents and dictate prices. With the 360, MS got ATI to do the design, but then bought the IP and did their own manufacturing.
I wonder why Nvidia is waving around what seems to be an outdated poison pill clause that would make any sort of hostile takeover or buyout very expensive. Maybe they have had a few unwanted approaches, and are trying to put out a message?
Having said that, Nvidia's grand entry (not) in the HPC market now seems to be swept under the rug, and all they can talk about is mobile and pads, and that sort of technology might make Nvidia an attractive takeover target for some of the mobile players.
I wonder why Nvidia is waving around what seems to be an outdated poison pill clause that would make any sort of hostile takeover or buyout very expensive. Maybe they have had a few unwanted approaches, and are trying to put out a message?
Having said that, Nvidia's grand entry (not) in the HPC market now seems to be swept under the rug, and all they can talk about is mobile and pads, and that sort of technology might make Nvidia an attractive takeover target for some of the mobile players.
Davros said:
The provision only applies to offers made to the board of directors. You can sell your shares to whomever you please but a hostile acquisition by a thousand bites is more easily defended and more expensive to pull off. This is just MS saying "if you guys get an offer you have to let us counter offer if we want to". It's very simple.
No.
If the agreement wasn't exclusive it would be useless. NV could just make another agreement with whoever and sell to them, essentially screwing over the first agreement.
I find it odd that it has an undefined term and I don't know that it would stand up in court in perpetuity. Not that MS gives a damn anymore as its original purpose has long since passed, I guess it's quite possible they could still extract some value from it, by negotiating it away (if they wanted to own NV they wouldn't have this clause, they would have bought them).
I'm surprised this thread is still missing the obvious. Microsoft bothered with this exclusive counter offer deal, yet they made the worst possible contract possible for the actual chip by allowing NVIDIA to keep selling it at a fixed cost. I don't know who negotiated this stuff, but they clearly should never be let near a negotiation table ever again. And thankfully that was apparently the case looking at the much more reasonable XBox360 deals.
A great Xbox contract, apparently…
Does that mean no one else can match the offer
Bouncing Zabaglione Bros.
Legend
Anyone can offer anything they like for a big chunk of Nvidia. If that happens, Nvidia has to give Microsoft the option to pay that same amount of money for that same amount of Nvidia instead of the original buyer. It's an option for first refusal, and MS can decline. If the original buyer wants to offer more, and MS doesn't want to match it, they don't have to, and the original buyer gets the shares (and the company).
There's probably a lot more stuff in the small print of such a complex corporate contract, but that's the gist of it ie. MS gets first refusal in the event of someone trying to buy Nvidia.
Bouncing Zabaglione Bros.
Legend
Yes, it's a way for Nvidia to protect itself from hostile takeovers via the poison pill of MS always having the option of first refusal, and for MS to protect itself against losing the supply for Xbox 1 chips.
It's just the same as if you promised your next door neighbour first crack at your house if you decide to sell it. Your neighbour may really like your house, or he may not want anyone else to have it so that he can have a nice quiet next door house by owning it himself.
Don't forget, that companies don't always have to take the highest offer because other factors may come into play. With this contract, MS can always have the opportunity to match the other buyer, even if the other buyer is a much better match or long term proposal.
Good question. Perhaps they originally intended for NVIDIA to supply the Xbox 2's GPU as well…? When the Xbox was released, in 2001, or rather when it was designed, perhaps a couple of years earlier, ATI wasn't really much of a contender.
8500 would have been competitive, arguably better than what wound up in the xbox.
I hated the 8500. 