WHEN: Today, Monday, November 30
WHERE: CNBC’s “Squawk on the Street”
Following is the unofficial transcript of breaking news from CNBC’s David Faber on CNBC’s “Squawk on the Street” (M-F, 9AM-11AM ET) today, Monday, November 30. Following is a link to the video on CNBC.com: https://www.cnbc.com/video/2020/11/30/salesforce-slack-deal-expected-to-be-announced-dec-1-sources.html.
All references must be sourced to CNBC.
DAVID FABER: The year ending with a lot of M&A activity, of course, we got a very large deal announcement this morning from S&P buying HIS. Want to get to that in a moment, but guys, also wanted to offer a bit more on a story that was reported last week. We haven’t gotten Jim’s take on as well, of course, involving a company he knows so well and that’s these reports of Salesforce being close to potentially buying Slack. I have a couple of things to add here for people based obviously on some recent reporting. You know, again, it was the Journal broken last week. We didn’t really get a sense on price and I can give you a little more clarity there. First of all, perhaps even surprisingly going to be a premium above the current stock price. Now how much? Well, that’s where it gets a little more difficult to say. But let’s say not to a $30 billion value for first lap but perhaps not that far from it. So it does appear that this is going to have been a very significant premium above, of course, the unaffected stock price as we like to call it. The composition of the deal, roughly I’m told half cash, half stock. It may be weighted a bit more towards the cash side, but I don’t know specifically, exactly, where it falls out percentage wise so let’s just say, roughly. And Jim, we’re going to get a deal announcement after the close tomorrow it would appear, again this is according to a number of sources familiar with the situation. So it does appear Salesforce is poised to buy Slack in a very high premium deal. Way through the comp multiples it would seem at this point, Jim. And I’m told, by the way as well, that Slack did not talk to any other potential buyers. They have engaged fully with Mr. Benioff, you seem a little – your face is – you seem upset.
JIM CRAMER: Well, I didn’t want to hear that kind of price in part because my charitable trust owns Salesforce, in part because I think that this is one that’s not as easily integrated. I know that Marc believes point blank that Microsoft no longer, let’s say it’s an axis versus the allies which are Marc. And just use that as a term briefly – just kind of funny, maybe not funny. Here’s the problem with Slack. It is been, without a doubt, hurt by the bundling that Microsoft has done. I think that you agree with me that the antitrust case is strong.
FABER: Yes.
CRAMER: And this is a fantastic opportunity for Salesforce to break up what I think is just one of these bundlings that – I talked to Stewart Butterfield about this – I think that Stewart is right.
FABER: Yeah, but they’re going to take it straight to Microsoft here. I mean, clearly going to war with Microsoft.
CRAMER: Yeah, well, that’s my point. It is going to war.
FABER: It was not that far from buying Salesforce a number of years ago. I mean they were getting really close. I remember my reporting at the time – didn’t obviously happen and a good thing for shareholders it would seem given all the value that’s been created since. But what’s wrong with taking it to Microsoft here and really going after it with this product?
CRAMER: Well because I’m worried about the synergistic notion in the same way that I was worried about the synergistic notion of Twitter. Here at least, you might be offer a soup to nuts. There isn’t anybody I know, David. I’m going to put it to immediately to say that Slack’s product is better than Microsoft’s. I think that almost every – I’ve used the product. I think it’s fantastic.
FABER: But you don’t think CRM would improve the product?
CRAMER: Oh, they could. I mean, they can easily integrate into much of their configurations, but I would have preferred something that is more – you can’t buy snowflake. You can’t. But something that would make it so it’s more data analytic.
FABER: He has paid huge multiples in the past. Tableau, I know for example. And it worked out quite well.
CRAMER: Tableau, brilliant. Tableau, brilliant. MuleSoft, fantastic. Not afraid to pay up. Recognizes that sometimes you have to. But David, this is a gigantic deal. it’s interesting as Salesforce stock was initially up and I think that’s because people came in this morning and didn’t see a deal. Yes, I mean, look, I think it’s a lot of money, David. I think that, you know, when you go through what Butterfield is saying, you’re really going to have to bust up something that Microsoft owns. Microsoft’s been incredibly effective at this, to the point where Butterfield has made a case that they’re strangled, even though they have a superior product, and that is a good antitrust case. When you have superior product and because of bundling, you look like you’re going to lose. You just knocked Salesforce down, David.
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