Microsoft’s conference call on its $7.2 billion Nokia Devices & Services acquisition just wrapped up, summarizing the key points of the deal, and the final question was one of the most intriguing: Did Microsoft inform ValueAct Capital about the impending acquisition before entering into the “cooperation agreement” with the activist shareholder last week?
“The answer is no,” said Microsoft general counsel Brad Smith, responding to the question from analyst Rick Sherlund of Nomura Securities. “You would not expect the company to disclose material, non-public information to an entity that doesn’t have an appropriate non-disclosure agreement, so the answer is no.”
It will be interesting to see how this affects the budding relationship between ValueAct and Microsoft. The companies announced a deal on Friday that gives ValueAct the option to put its president on the Microsoft board, the first time a major investor has gotten a foot in the door at Microsoft in this way.
ValueAct’s CEO Jeffrey Ubben said in a 2012 CNBC interview, “When we go on a board, it means we’re basically locking ourselves up, we’re getting married. We see a five-year opportunity to grow our capital 20 percent, and we think we can be partners with management.”