When Microsoft announced last fall that it would buy Nokia’s handset business for $7.2 billion, jaws dropped across Wall Street.
And according to a new article in Bloomberg Businessweek, they did inside the technology giant’s boardroom as well.
In its latest issue, the magazine details how Steven A. Ballmer, then Microsoft’s chief executive, chafed when fellow directors questioned the wisdom of buying any part of Nokia’s hardware operations. At times, Mr. Ballmer even displayed some of his famous temper, including when his eventual replacement as chief executive, Satya Nadella, initially failed to support the proposed transaction.
From Businessweek’s piece:
Ballmer’s relations with the board hit a low when he shouted at a June meeting that if he didn’t get his way he couldn’t be CEO, people briefed on the meeting said. The flare-up was over his proposed purchase of most of Nokia Oyj, and part of an ongoing debate: Should Microsoft be a software company or a hardware company too?
Several directors and co-founder and then-Chairman Bill Gates â€" Ballmer’s longtime friend and advocate â€" initially balked at the move into making smartphones, according to people familiar with the situation. So, at first, did Nadella, signaling his position in a straw poll to gauge executives’ reaction to the deal. Nadella later changed his mind. …
Ballmer was so loud that day in June his shouts could be heard outside the conference room, people with knowledge of the matter said. He’d just been told the board didn’t back his plan to acquire two Nokia units, according to people with knowledge of the meeting. He later got most of what he wanted, with the board signing off on a $7.2 billion purchase of Nokia’s mobile-phone business, but by then the damage was done.
Businessweek also uncovered an interesting detail about Microsoft’s dealings with ValueAct, the activist hedge fund that eventually won a seat on the company’s board.
[In the last week of last August], the board engaged in a stare-down with activist shareholder ValueAct Holdings LP. The fund was demanding a board seat and threatening a proxy contest. On the final day for proxy matters, the board negotiated with ValueAct executives while a ValueAct messenger in a hoodie lingered in the lobby with the proxy fight paperwork, just in case.
