According to the Times‘ Bits blog, while testifying at a California Department of Corporations hearing in August related to Facebook’s acquisition of Instagram, Kevin Systrom, CEO of the photo-sharing app, when asked if Instagram had received any other offers besides Facebook’s, said:
We never received any formal offers or term sheets. No.
Yet, Twitter and Facebook sources, as well as documents reviewed by the Times, tell a different tale, saying that Systrom and Instagram Co-Founder Mike Krieger held several meetings with top Twitter executives, as late as March, and that the two parties had verbally agreed to a price tag of $525 million in cash and Twitter shares, before Systrom told Twitter in late March that Instagram would “remain independent.”
Less than three weeks after that, Facebook announced what was then a $1 billion deal to acquire Instagram, with the transaction finally valued at $715 million due to Facebook’s slumping stock price following its initial public offering May 18.
The Times also reported that Facebook General Counsel Ted Ullyot wrote in its application to regulators in California that there was a “lack of interest in acquiring the company expressed by other potential acquirers of the company,” referring to Instagram.
California Department of Corporations Director of Communications Mark Leyes told the Times:
(The agency has) not received any complaints or protests of our original fairness hearing proceedings in the Facebook/Instagram acquisition.
Readers: What do you think occurred behind the scenes?