May 26, 2022

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Twitter in Advanced Talks to sell himself to Elon Musk

Twitter in Advanced Talks to sell himself to Elon Musk

Two people familiar with the situation said that Twitter is close to a deal to sell itself to Elon Musk, in a move that would unite the world’s richest man with the influential social networking service.

The Twitter board was negotiating with Mr Musk in the early hours of Monday about it Unsolicited attempt To buy the company, after starting to line up $46.5 billion In financing the show last week, people who spoke on condition of anonymity said they were not authorized to discuss classified information. They said the two sides were discussing details including a timetable for closing any potential deal and any fees that would be paid if an agreement was signed and then collapsed.

The discussions followed a Sunday morning Twitter board meeting to discuss Mr. Musk’s offer, People said. Getting commitments to the funding was a turning point in how the board viewed Mr. Musk’s offer of $54.20 per share, the people said, enabling the company’s 11 board members to consider his offer.

The deal was not final yet and may still be separate, but what initially seemed a highly improbable deal seemed to be coming to an end. People familiar with the situation said that the situation between Twitter and Mr. Musk remains fluid and fast-moving.

Mr. Musk, who has more than 83 million followers on Twitter and began raising shares in the company earlier this year, announced his intention to buy the company on April 14 and make it private. But soon Wall Street rejected his proposal because it wasn’t clear if he could Come with the money to do the deal. Twitter too Adopted “toxic pill” A defensive maneuver that prevents Mr. Musk from amassing more stock.

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Mr Musk updated his proposal last week, putting pressure on Twitter to consider his offer more seriously. In a securities filing released Thursday, Mr. Musk outlined how he raised funding from investment bank Morgan Stanley and a group of other lenders who were providing 13 billion dollars In debt financing, in addition to another 12.5 billion dollars in loans against his shares in Tesla, the electric car maker he runs. Was expected to add about $21 billion in equity financing.

A Twitter spokesperson declined to comment. In previous public statements, the company said its board of directors “continues to conduct a careful, thorough, and considered review to determine a course of action that is in the best interest of the company and all of Twitter’s shareholders.”

Mr. Musk did not respond to a request for comment. The Wall Street Journal I mentioned earlier Twitter’s acceptance of Mr. Musk’s offer increased.

Wall Street was likely to see the Twitter board’s openness to Mr. Musk’s bid as “the beginning of the end for Twitter as a public company with Musk likely now on the path to an acquisition unless a second bidder gets into the mix,” Wedbush analyst Dan Ives wrote. Securities, in a note on Sunday.

Mr. Musk offered Twitter a 54 percent premium to the stock price the day before he began investing in the company in late January. But Twitter shares have traded above Mr Musk’s bid for most of the past year.

Several analysts said they only expect Twitter’s board of directors to accept an offer valued at at least $60 per share. Twitter stock soared above $70 a share last year When the company announced goals to double its revenueIt has since fallen to around $48 as investors questioned its ability to achieve these goals.

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Mr. Musk, 50, made it clear that he sees many of the shortcomings of Twitter as a social media service. He has said he wants to “turn” the company into a “platform for freedom of expression worldwide” and that it requires major improvements in its products and policies.

Mr. Musk has attempted to negotiate with Twitter using the same service, threatening in several tweets that he might take his offer directly to the company’s shareholders in a so-called “bid offer”. A tender offer is a hostile maneuver in which an outside party circumvents a company’s board of directors by requiring shareholders to sell their shares to them directly.

He has also behaved erratically on the platform, which has raised concerns about how he would manage the service if he was in charge of it. Saturday Mr. Musk Billionaire Bill Gates targeted, saying that Mr. Gates had taken a “short” position on Tesla stock, meaning that Mr. Gates was betting that the automaker’s stock would fall. On Sunday, Mr. Musk tweeted that “moving forward“It’s a mockery of Mr. Gates.

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However, Mr. Musk maintains friendly relations with some of Twitter’s top members. Over the weekend, Mr. Musk exchanged friendly tweets with Jack Dorsey, the company’s co-founder and board member. Mr. Dorsey resigned as Twitter’s CEO in November and will soon be leaving its board of directors.

Both men share similar views on cryptocurrency and promote more freedom of expression online. When Mr. Musk flirted briefly to join Twitter’s board this month, Mr. Dorsey chirp“I am really happy to have Elon join the Twitter board! He cares so deeply about our world and Twitter’s role in it.”

On Friday, Block, a financial services firm led by Mr. Dorsey, revealed that he had changed his title at the company from CEO to “Block Head.” This shift seemed to resonate with Mr. Musk.

“Your new block nickname is fire,” Mr. Musk tweeted to Mr. Dorsey on Saturday, using two smoldering emojis to indicate his approval. Last year, Musk changed his title at Tesla from CEO to Technoking.