Twitter may be moving closer to an agreement with Elon Musk.
The board of the social media service met Sunday morning to discuss Mr. Musk’s unsolicited bid of $ 46.5 billion to buy the company after he began running to fund his offer last week, said two people with knowledge of the situation. The funding was a turning point in how Twitter’s board viewed Mr. Musk’s bid of $ 54.20 per. share, which allowed the company’s 11 board members to seriously consider his offer, people said.
Twitter’s board planned to meet with Mr. Musk’s page later on Sunday to discuss other contours around a potential deal, said the people, who spoke on condition of anonymity because they were not authorized to discuss confidential information. These details include a timeline for closing any potential deal and any fees that would be paid if a deal was signed and then fell apart.
Any deal is still far from secure, but Twitter’s board willing to engage with Mr. Musk, the richest man in the world, represents a step forward. Mr. Musk, which has more than 83 million followers on Twitter and began collecting shares in the company earlier this year, declared its intention to buy the company on April 14 and take it private. But his proposal was quickly rejected by Wall Street because it was unclear whether he could come up with the money to make the deal. Twitter also adopted a “poison pill,” a defensive maneuver that would prevent Mr. Musk in accumulating more of the company’s shares.
Mr. Musk updated his proposal last week and put pressure on Twitter to more seriously consider his bid. In a securities application on Thursday, Mr Musk described how he had put together funding from investment bank Morgan Stanley and a group of other lenders, which offered $ 13 billion in debt financing plus an additional $ 12.5 billion in loans against his stake in Tesla. , the electric car manufacturer he runs. He was expected to add about $ 21 billion in equity financing.
Now, what appeared to be a highly unlikely deal may be more likely. The situation involving Twitter and Mr. Musk, remains fluid and in rapid motion, said people with knowledge of the situation.
A Twitter spokesman declined to comment. In previous public statements, the company had said its board of directors “continued to conduct a careful, comprehensive and deliberate review to determine the course of action in the best interests of the company and all Twitter shareholders.”
Mr. Musk did not respond to a request for comment. The Wall Street Journal previously reported Twitter’s increased receptivity to Mr Musk’s bid.
Wall Street would likely see Twitter’s board openness to Mr. Musk’s bid as “the beginning of the end for Twitter as a public company, where Musk is probably now on his way to acquiring the company unless another bidder joins the mix.” Dan Ives, an analyst at Wedbush Securities, wrote in a note Sunday.
Mr. Musk’s offer on Twitter is a premium of 54 percent compared to the stock price the day before he started investing in the company at the end of January. But Twitter’s shares traded higher than Mr. Musk’s bid for much of last year.
Several analysts have said they expected Twitter’s board would only accept a bid that rated it at a minimum of $ 60 per share. shares. Twitter’s stock rose above $ 70 a share last year as the company announced targets for doubling its revenue, but has since fallen to around $ 48 as investors have questioned its ability to achieve those targets.
Musk, 50, has made it clear that he sees many shortcomings in Twitter as a social media service. He has said he wants to “transform” the company as a “platform for freedom of expression across the globe” and that it requires major improvements in its product and policies.
Musk has tried to negotiate with Twitter using the service itself and threatened in several tweets that he could take his bid directly to the company’s shareholders in what is called a “takeover bid”. A takeover bid is a hostile maneuver in which an external party bypasses a company’s board of directors by asking shareholders to sell their shares directly to them.
He has also acted erratically on the platform, raising concerns about how he could manage the service if he were to be in charge of it. On Saturday, Mr Musk aimed at billionaire Bill Gates, and said that Mr. Gates had taken a “short” position on the Tesla stock, which meant that Mr. Gates bet the carmaker’s shares would fall. On Sunday, Mr Musk tweeted that he was “move on”From making fun of Mr. Gates.
What happens to Elon Musk’s bid on Twitter?
The offer. Elon Musk, the world’s richest man, made an unsolicited bid worth more than $ 43 billion for the social media company. Mr. Musk said he wanted to make Twitter a private company and that he wanted people to be able to talk more freely about the service.
Still, Mr. maintains Musk amicable ties with some senior members of Twitter. Over the weekend, Mr. Musk friendly tweets with Jack Dorsey, the company’s co-founder and a board member. Mr. Dorsey resigned as Twitter’s CEO in November and will soon be leaving the board.
Both men share similar views on cryptocurrencies and on promoting more free speech online. Da Mr. Musk briefly flirted with joining Twitter’s board this month, Mr. Dorsey tweeted“I’m really happy that Elon is joining the Twitter board! He’s deeply concerned about our world and Twitter’s role in it.”
On Friday, Block, a financial company led by Mr. Dorsey that he had changed his title in the company from CEO to “Block Head”. That shift seemed to resonate with Mr. Musk.
“Your new title on Block is Fire,” tweeted Mr. Musk on Mr. Dorsey on Saturday used two flame emojis to mark his approval. Last year, Mr Musk had changed his title at Tesla from CEO to technoking.