An Oops for Goldman Sachs in Its Advice on Vista-Tibco Merger (Dealbook article)

The short of it is that the shares were double counted, which led to a deal that was worth $100 million more than it should have been. I'm sweating just thinking about making a mistake like that in a model.

http://dealbook.nytimes.com/2014/10/17/an-oops-for...

Comments (9)

Oct 17, 2014

go back to reddit

Oct 17, 2014

lol

Oct 17, 2014

My heart goes out to the individual responsible....

Oct 17, 2014

Given that consideration per share is the same (i.e. every shareholder receives the same amount for their ownership) after fixing this error, this is not a big deal. Will slightly change multiples, but by such a small margin that it doesn't matter.

Oct 17, 2014
ricottacheese:

Given that consideration per share is the same (i.e. every shareholder receives the same amount for their ownership) after fixing this error, this is not a big deal. Will slightly change multiples, but by such a small margin that it doesn't matter.

Completely true but it would suck to be the guy who fucked that one up.

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Oct 17, 2014

That poor analyst gonna get his nuts clipped.

Oct 17, 2014
ricottacheese:

Given that consideration per share is the same (i.e. every shareholder receives the same amount for their ownership) after fixing this error, this is not a big deal. Will slightly change multiples, but by such a small margin that it doesn't matter.

Have to disagree, this is a huge issue. Consideration per share isn't the same! Vista's returns are contingent on the total check it writes. If Vista was willing to pay $4.3bn (i.e., its equity check at that EV generated sufficient returns) and instead only has to pay $4.2bn, $0.61 per share in value has been lost. 2.5% of equity value is not negligible, and I'm sure Vista is delighted.

PE shops that frequently purchase public companies are maniacally focused on share count for precisely this reason.

Oct 18, 2014
cell phone bill:

Pretty sure Vista didn't rely on Goldman for anything besides the fairness opinion. Any PE fund would run its own analysis and determine for itself what to pay. The only thing this error screwed up was the press release and the analyst's bonus.

GS advised Tibco, not Vista... Vista doesn't need a fairness opinion.

Oct 18, 2014
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