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SEC Values Microsoft's Greenfield Acquisition At $524 Million

The software maker in August said it would pay $486 million for the operator of Ciao.com.
Microsoft's deal to acquire European e-commerce operator Greenfield Online is worth $524 million, according to a document filed Thursday with the U.S. Securities and Exchange Commission. Microsoft announced its intention to acquire the company in August. At the time, it said the transaction was worth $486 million.

The discrepancy, according to Microsoft, is due to the fact that, for the purpose of calculating filing fees, the SEC values stock options based on their book value, not their exercise price.

Greenfield operates online shopping portals under the name Ciao in Europe. It has also launched a beta version of the site for the U.S. market. Last month, a group of Greenfield investors sued Greenfield, the company's directors, and Microsoft, claiming that the deal's announced price of $489 million undervalues Greenfield. Earlier this week, Greenfield said the deal had received antitrust clearance in Germany. Microsoft also said it had made a required antitrust filing in Italy.

According to the SEC document, the acquisition's $524 million value is the product of 26,339,931 outstanding common shares of Greenfield and 3,609,953 outstanding stock options multiplied by Microsoft's original offer price of $17.50 per share.

The SEC document also notes that all Greenfield directors, with the exception of company chairman Joel Mesznik and Joseph Ripp, will resign upon completion of the deal, and will be replaced by Microsoft legal executives Keith Dolliver, Benjamin Orndorff, and John Seethoff.

Ciao's Web sites let users search for and buy a wide range of tech products while comparing prices from numerous online retailers. It operates sites in seven major European countries and languages. Ciao also recently launched Ciao.com, a beta site aimed at the U.S. market.

Microsoft said the sites would be integrated into its Live Search portal in Europe, where Ciao is most popular. Overseeing Ciao's operations will be Rajat Taneja, Microsoft's general manager for worldwide commercial search.

Microsoft is looking to bolster its presence in the search and e-commerce markets. In July, it bought out Powerset for a reported $100 million. Powerset specializes in an esoteric form of Web querying called semantic search. Earlier this year, Microsoft bid $1.2 billion for Fast Search & Transfer, which lets business users sift through corporate databases for structured and unstructured information.

Microsoft shares were off 5.65% to $21.04 in midafternoon trading Friday as world financial markets continued their slide.

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