Instagram agreed to be acquired by Twitter before settling on Facebook
According count from the New York Times, months before facebook announced that Instagram accepted his bid for one billion dollars (715 million were finally in September), Kevin Systrom, CEO of the photo application, have verbally agreed to sell Instagram to Twitter for $ 525 million in March.
The news could go through a simple story but for which Systrom himself have refused to California regulators that there was any other offer apart from Facebook. A story that could bring legal challenges to both Facebook and Instagram if shown the “formality” of the offer to Twitter, who did not get a chance to counter.
As most know, just before the month of May, when the tender offer launched by Instagram Facebook, Mark Zuckerberg pushed for that final agreement in cash and stock. A transaction which closed in September for $ 715 million, reflecting the decline of Facebook shares from the initial offer of one billion.
According to the newspaper account, during negotiations with Instagram Twitter executives came to finish a term sheet setting out the terms of the proposed transaction for $ 525 million. An operation which finally closed and refused Systrom himself in late August.
That morning, before California regulators, took an oath before testifying at the hearing that sought to determine whether the acquisition of Facebook was the best deal for investors Instagram. When asked if their company had received any other offers in addition to Facebook, Systrom would say:
No, we have never received any offers. Instagram had talked to others, but never received any formal offer from anyone else.
Lawyers for state regulators again asked if negotiations before received an offer of investment, to which Systrom repeated that:
We never received any formal offer period or leaves. No.
According to the newspaper, the stories made from people close to Twitter and Facebook with a set of documents that are holding call into question the words of the CEO of Instagram. A verbal agreement with Twitter that was eventually rejected by the photo application on the grounds that they preferred “to remain independent.” Three weeks later, Twitter and the rest of the world found out that Facebook’s acquired.
The sources speak of surprise Twitter executives who did not understand that they were given no chance to counter and they were willing to raise it.
Anyway, if shown to exist that offer formal Twitter, Facebook and Instagram could have legal problems. Systrom’s testimony carries risks of perjury or fraud risk because Twitter did not receive an opportunity to provide a counter-counter. In addition, investors may have lost Instagram chance to make more money with the purchase.
According to the newspaper, so far neither Twitter nor Facebook have tried to answer the note.Tags: facebook, Instagram, Twitter