April 08, 2008

Organisational Rape ?

Two news items caught my imagination in the papers today. Incidently, both were on the Business page. And further more, both were very similar in generality.

News Item One spoke of the much maligned takeover of Yahoo Inc by the big giant Microsoft. MS has quoted 41 billion green bucks for Yahoo. Till now, Yahoo has kept MS away. Today's news item spoke of two things. One that Yahoo is not averse to a deal if its get a better price. Fine enough. Second was the fact that in case Yahoo does not agree, then MS might go in for a hostile takeover of Yahoo, which may not be in the best interests of Yahoo's shareholders.

News Item Two spoke of our own desi pharmaceutical house Orchid Pharma being linked to a takeover by pharma major Ranbaxy. Again the disturbing fact was the statement that Orchid will try to resist a hostile takeover. The story has been rich fodder for CNBC-TV18 and NDTV Profit is what I learn now.

All I wanted to ask Microsoft and Ranbaxy is if they consider Yahoo and Orchid respectively to be their 'baap ki jaagir' ? Why else would you talk of hostile takeovers if the other party isn't game to being taken over or being bought out? Does it not amount to something akin to an organisational rape ?

Can anyone enlighten me regarding this, considering that even small financial matters - not to speak of major takeovers - hostile or otherwise - are nothing less than Joel 'Big Bird' Garner's bouncers to me.

I am waiting....

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  1. LOL.....

    Thats what called business dear;-)))

    everything is hostile....

  2. i ain't no biz expert but it would be interesting if yahoo and MS merged.... it'll be a big competition for google...

    And the second coz of generic drugs...

  3. Chaks.. looks like everything is indeed hostile! The way Ranbaxy is going about the deal.. it indeed is a hostile takeover. Sad biz.

  4. NG.. yep, the deal will create a toughie for Google. But I'm sure Google will get over them.

    Bulk drugs are a big market today, bigger than retail. Indeed Orchid has a strong presence in bulk.. but then the deal could have been done properly and not involving an hostile takeover.

  5. Vrij.....

    U have seen corporate...and if u learn these business terms u wud surely realize why everything is hostile....

    Business tactics are not less then a murder:-)))

  6. I wont laugh on this one. This is serious issue.
    Organisational rape...perfect term there. I think these big-wigs just just plain green with envy. Thats all.
    And what shit is this "hostile takeover" ?!!
    No one prob'ly realises anymore that once there was a thing called 'business ethics'.
    Why cant the company just let them be ? I am very pissed on this, and that leaves me at a loss of words. HOw can you watch your whole world fall apart in a stranger's arms...a world that you carved out with your own hands, pebble by pebble...??!!!
    I never liked Microsoft anyway. And I am glad all over again I aint into software. But equally sad to see my frens go thru this shit. This sux !!

  7. Chaks.. yep seen Corp once on TV. And yes, biz is cruel!

    Cinderella.. whoa whoa.. u seem pretty worked up! Yes, a lot of things happening in todays biz is shorn of all ethics. Unfortunate but true. Also this is not just in the software field. Probably the least there. Its more in the pharma, advert and banking biz..

  8. Business is all about money.

    I dont understand the fuss u guys have created here about hostility in a takeover.Its all about who is the majority shareholder!

    If one has the money power to buy a majority stake in the shares ...one will go for it..provided its a lucrative valuation.

    Either the managment gives their sweet ascent to this or crib,dosnt matter.If the managment try to disrupt it,then the buyer can go to shareholder directly and buy their share.

    Whats so wrong in this?Dont shareholder buy and sell shares in capital market?So if majority of the share holders want to sell their shares to MS ,its their own sweet will,and managmnet of Yahoo just can stop them.

    Same with Orchid.In fact if Orchid/Yahoo had the financial muscle they would have bought MS or Ranabaxy!

    Its surviaval of fittest.Natural order.Where does the Q of rape /ethics etc come into?

  9. a new and interesting term there..I really like it.


  10. Fighter Jet.. agreed that Yahoo/Orchid may not have the financial muscle of MS or Ranbaxy, but that does not mean they sell themselves even if they dont want to.

    If I come and say get out of ur house as I want to buy it.. will u agree? Or maybe I will buy ur girlfriend.. either u give ur sweet ascent or I take over without ur permission.

    It should not work that way. Thats why I call it rape.

  11. Keshi.. Thanx a lot :)

    Chaks.. :) :)

  12. Why is ur "khoobsoorat chehra" not appearing...;-)))

  13. OK let us talk cricket...something u know better than me. If you think that the pitch at Kanpur being made to the Indian batting condition is right then it is the same situation with corporate takeovers - hostile or not. Dhoni presented a gift cheque of Rs 10K to the ground curator for preparing the pitch where India won. Isn't that unfair. Well it is an accepted thing in cricket. South African pitchmen would do the same had the Test been played in SA. Sometimes skewness is acceptable. Same in corporate world. Let us not forget the fact that both MS and YAhoo are public limited companies and are not owned by one or a few promoters. They are owned by all their shareholders. So if MS wants to takeover Yahoio, it must e for the benefit of the shareholders else the takover bid is not ratified. Similarly, it is the shareholders of Yahoo who must be the ratifiers. If the takeover is hostile and Yahoo shareholders approve it, they must be wishing a change in management for the poor state of affairs with the current management and both they and MS are justified. The term 'hostile' is due to the few major shareand stake holders of Yahoo who resist MS to safeguard their own control. So it is baap ka jaagir issue for both MS and the few major shareholders of Yahoo. The ones who provide better value to the shareholders at large are the ones justified in their baap ka jaagir effort. End of the day, whoever takes control benefits from it and whoever loses it benefits even more in form of liquid cash. Finally it boils down to shareholders u see. To add, there is also SEC which safeguards shareholders interest as a government body (akin to our own SEBI). So MS has to get SEC's nod anyway.

    OK now let me show you something else. Click on the link below. Read the quote Gordon Gekko: [at the Teldar Paper stockholder's meeting]. And Watch the movie if you get a chance.