Things to do at CyberSource: Work on poker face…

CyberSource (ticker: CYBS), the Mountain View electronic payment systems company, learned a tricky lesson this year in the realm of mergers and acquisitions. Everyone knows there’s a ritual of give and take where each side tries to figure just how much it can squeeze and still get a deal. Well, CyberSource got squeezed.

Back in June, CyberSource announced it was paying $565 million in cash and stock for Authorize.net, another electronic payment company based in Marlborough, MA. In a proxy filed on Thursday, CyberSource disclosed the background of its merger talks.

In fact, CyberSource tried to buy Authorize.net back in 2004, but was outbid by Lightbridge. In April 2007, Lightbridge changed its name to Authorize.net. Back in June 2006, Authorize.net (then called Lightbridge) contacted CyberSource about a possible merger. In October 2006: CyberSource made its first tentative bid: about $12.50 per share.

No thanks, said Authorize.net, but let’s keep talking. And so they did. And in the meantime, up went Authorize.net’s stock price.

Discussions dragged on through the spring. And long story short, CyberSource eventually ended up agreeing to a deal worth $19.33 per share, using a mix of stock and $125 million in cash.

courtesy San Jose Mercury Blog

News Added: 21 September, 2007

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