Elon Musk and Twitter are reportedly approaching a deal that will allow the world’s richest man to take over the social media company.
The two sides engaged in detailed talks over the weekend, discussing details of a possible takeover, including a timetable and possible break-up fees if the deal falls apart, according to the New York Times, Wall Street Journal and other media.
Reports say a formal agreement could be reached this week, probably as early as Monday. Shares of Twitter rose four percent to $ 50.49 a share on Monday, but below what Musk called his “best and last” offer of $ 54.20. That would cost the social media giant $ 43 billion.
Obtaining $ 46.5 billion in funding commitments was a turning point that allowed the Twitter board to seriously consider Musk’s offer, people familiar with the deal told the New York Times.
Twitter and Musk did not respond to requests for comment.
Lack of a better offer
This is the latest development in a fast-paced saga of the past few weeks, which saw the world’s richest man quietly buy enough shares in the company to become its largest sole shareholder before announcing his interest in the company for “passive” and denies he had any interest in controlling it.
After being invited to join the board, Musk turned down the offer and became more aggressive, launching a formal takeover offer. The Twitter board dismissed this by using a “poison pill” designed to thwart any unwanted achievements.
The move was largely intended to buy the company some time to come up with a better alternative to Musk’s proposal, but the sudden receptivity on board is a sign that they have failed to come up with another plan, Wedbush Securities analyst Dan said. Ives.
“By the time the board approves the poison pill, which essentially gave them time to find a white knight and a second candidate, they are probably empty-handed,” he said Sunday.
WATCH That’s why Musk wants to buy Twitter:
An analyst disrupts Musk’s move on Twitter
Wedbush Securities analyst Dan Ives discusses why Elon Musk is trying to buy Twitter and whether the hostile takeover of the billionaire is likely to succeed or not. 3:39
Musk said he wanted to buy Twitter because he did not think it was fulfilling its potential as a platform for free speech.
In recent weeks, he has voiced a number of proposed changes to the company, from easing content restrictions – such as rules that suspend the account of former US President Donald Trump – to freeing the platform from its problems with fake and automated accounts.
Musk says Twitter must be private so that it is not bound by the constraints faced by public companies, and can focus on making changes to ensure freedom of speech, adding an edit button and combating spam.
I’m going alone
Recent developments signal the beginning of a new chapter on Twitter, with the most likely scenario being Musk taking over, Ives said.
“[Wall] Street will read this news today as the beginning of the end of Twitter as a public company, with Musk probably on the verge of acquiring the company unless a second candidate joins, “Ives said.
Some of the company’s investors are eager to avoid a protracted affair.
“I’d say take $ 54.20 a share and that’s it,” Sahm Adrangi, a portfolio manager at Kerrisdale Capital Management, a hedge fund that owns more than a million shares in the company, told Reuters.
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