Hostile Takeover Bid of $645M for Limelight Networks


Here some big CDN news. The Phoenix Business Journal is reporting that Tuition Build Inc. based in The Silicon Valley, has made a hostile offer for Limelight Networks (LLNW) for $644M, or $6.55/share, a nice premium over Friday’s closing price of $2.83/share. We all know that Goldman Sachs owns the lion’s share of LLNW stock. If we do a little math, and subtract LLNW market cap of $277M from the $644M, the difference is $367M. Goldman Sachs (GS) recorded net income of $7.7B in 2013, and $1.9B in net income in the 1st quarter of 2014.

If we guesstimate, Goldman Sachs is likely to hit $4B in net income mid-year in 2014. What does this have to do with LLNW? Everything, in that $367M isn’t really going to move the net income needle in GS favor. GS likes big fat paydays, and this certainly isn’t one of them. Also, making a hostile bid for a Goldman Sachs owned company isn’t likely to go anywhere, for GS is the Kings of Wall Street. If anything, GS is better off selling LLNW to Akamai than a Private Equity fund. LLNW is likely to flourish more under the umbrella of the dominant CDN, than someone who wants to get their feet wet in the extremely competitive CDN Market. LLNW, don’t sell. Either go for the big pay day by investing and building up LLNW, or sell it off to Akamai.

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