Two thousand years from now, when archaeologists dig up the bones of present-day CEOs, they will find that those who were in any way related to their company’s founders had a mutated gene in the DNA which kept them from accepting generous offers for their companies.
Perhaps it is nothing more than the need to save their pride. Yesterday, Yahoo! (YHOO) finally rejected a bid from Microsoft (MSFT). The shares now trade about $10 below the offer from Redmond. The stock had not been above $35 since early 2006 and is not likely to get back there anytime soon. Miserable earnings will see to that.
Over at the beer company, Anheuser-Busch (BUD) has an offer of $65 from InBev. The stock has never traded that high. It appears that BUD is trying to cut an M&A deal with Grupo Modelo that would make the combined Mexican/US company too expensive for InBev to buy.
In is very likely that the shares in both companies will drop by a quarter to a third because the "founding families" do not want to give up their jobs.
It might be worthwhile to check with a therapist to see what is going on, but interpreting the actions may not be that complex.
The Busch family, now four generations away from the life of their founder, and Jerry Yang, a founder in full, are already rich and the premium they would get for their shares is not useful. They already have the four homes and private jets. The extra cash does them no good.
But, being the head of a big company is not a set of circumstances that can be replaced. The numbers of CEOs at really large US companies measures in the hundreds. Rich people are a dime a dozen.
Yang and Busch have likely arranged to keep their jobs. The shareholder will not get their yachts.
Giving up a right due to an obligation does not seem to be part of the make-up of these people. If they went away, it would cut down on the number of people who are both rich and powerful. That would be a shame.
Douglas A. McIntyre
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