Twitter may be close to a deal with Elon Musk.
The board of the social media service met Sunday morning to discuss Mr. Musk’s unsolicited $ 46.5 billion bid to buy the company after he began ordering funding for his bid last week, two people said. familiar with the situation. Funding was a turning point in the way the Twitter board viewed Mr. Musk’s $ 54.20 share offer, which allowed the company’s 11 board members to seriously consider his offer, people said.
The Twitter board plans to meet with Mr. Musk’s party later Sunday to discuss other outlines around a potential deal, people who spoke on condition of anonymity said they were not authorized to discuss confidential information. These details include a timetable for the completion of each potential transaction and any fees that would be paid if the agreement were signed and then terminated.
Any deal remains far from certain, but the Twitter board’s desire to engage with Mr. Musk, the world’s richest man, is a step forward. Mr Musk, who has more than 83 million followers on Twitter and started amassing shares in the company earlier this year, announced his intention to buy the company on April 14 and make it private. But his offer was quickly rejected by Wall Street because it was unclear if he could find the money for the deal. Twitter also adopted a “poison pill”, a defensive maneuver that would prevent Mr Musk from accumulating more than the company’s stock.
Mr Musk updated his proposal last week, putting pressure on Twitter to consider its proposal more seriously. In a security paper released publicly on Thursday, Mr Musk described in detail how he had raised funding from investment bank Morgan Stanley and a group of other creditors who offered $ 13 billion in debt financing, plus another $ 12.5 billion in loans against his shares in Tesla, the electric car maker he runs. He was expected to add about $ 21 billion in capital funding.
Now what seemed like an extremely incredible deal may be more likely. The situation with Twitter and Mr. Musk remains smooth and fast-paced, said people familiar with the situation.
A Twitter spokesman declined to comment. In previous public statements, the company said its board “continues to conduct a careful, comprehensive and informed review to determine the course of action in the best interests of the company and all shareholders on Twitter.”
Mr Musk did not respond to a request for comment. The Wall Street Journal previously reported on Twitter’s heightened receptivity to Mr Musk’s candidacy.
Wall Street is likely to see the Twitter board’s openness to Mr Musk’s offer as “the beginning of the end for Twitter as a public company, with Musk probably now on the verge of acquiring the company unless a second candidate joins the mix”, Dan Ives , an analyst at Wedbush Securities, wrote in a note on Sunday.
Mr Musk’s offer for Twitter was a 54% premium on the stock price the day before he began investing in the company in late January. But Twitter shares traded higher than Mr. Musk’s offer for most of last year.
Several analysts said they expect the Twitter board to accept only an offer that values it at a minimum of $ 60 per share. Shares of Twitter rose above $ 70 a share last year when the company announced its targets to double its earnings, but has since fallen to about $ 48 as investors have questioned its ability to meet those targets.
Mr Musk, 50, has said he sees many flaws in Twitter as a social media service. He said he wanted to “transform” the company as a “platform for free speech around the world” and called for huge improvements in its products and policies.
Mr Musk tried to negotiate with Twitter using the service itself, threatening in several tweets that he could send his offer directly to the company’s shareholders in the so-called “tender offer”. The tender is a hostile maneuver in which an outsider bypasses the company’s board, asking shareholders to sell their shares directly to them.
He has also acted chaotically on the platform, raising concerns about how he could manage the service if he were responsible for it. Mr Musk targeted billionaire Bill Gates on Saturday, saying Mr Gates had taken a “short” position on Tesla shares, meaning Mr Gates was betting that the carmaker’s shares would fall . On Sunday, Mr Musk tweeted that he was “continuing” to make fun of Mr Gates.
What is happening with Elon Musk’s offer for Twitter?
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The offer. Elon Musk, the richest man in the world, made an unwelcome bid worth more than $ 43 billion for the social media company. Mr Musk said he wanted to make Twitter a private company and wanted people to be able to speak more freely on the service.
What next? On April 21, Mr. Musk said he had received $ 46.5 billion in commitments to fund his bid. He added that he was considering pursuing a hostile takeover with a move known as a tender offer that would lead him to take his offer directly to Twitter shareholders.
However, Mr Musk has maintained friendly relations with some high-ranking Twitter members. Over the weekend, Mr. Musk exchanged friendly tweets with Jack Dorsey, co-founder and board member. Mr Dorsey has stepped down as Twitter’s chief executive in November and will soon leave his board.
Both men share similar views on cryptocurrencies and promoting more free speech online. When Mr. Musk briefly flirted with joining the Twitter board this month, Mr. Dorsey tweeted: “I’m really happy that Elon is joining the Twitter board! He is deeply concerned about our world and the role of Twitter in it.
On Friday, Block, a financial services company run by Mr Dorsey, revealed that he had changed his title at Block Head. This change seems to resonate with Mr Musk.
“Your new Block title is Fire,” Mr Musk tweeted to Mr Dorsey on Saturday, using two fiery emojis to express his approval. Last year, Mr. Musk changed his title at Tesla from CEO to Technoking.
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