Twitter has started negotiations with Elon Musk On Sunday, people familiar with the matter said, after he summoned shareholders with details of financing his $43 billion takeover offer.
The sources said the company’s decision to deal with Musk, made earlier on Sunday, does not mean it will accept his $54.20 share offer. This indicates, however, that Twitter He was exploring whether a sale to Musk might be possible on attractive terms.
Tesla CEO Musk has been meeting with Twitter shareholders in the past few days to get support for his proposal. He has said that Twitter needs to get private to grow and become a true platform for freedom of expression.
Shareholders pushed Twitter into talks after Musk outlined a detailed financing plan for his presentation Thursday and urged it not to let the chance of a deal go to waste.
The sources said that Musk’s insistence that he was making his “best and last” offer was an obstacle in the negotiations, but the board decided to engage with Musk to gather more information and possibly obtain better terms.
One of the sources told Reuters that Twitter wanted to learn more about any active investigations by regulators into Musk, including by the US Securities and Exchange Commission, that would jeopardize the deal.
Securities lawyers say Musk — who paid off charges that he misled investors by suggesting four years ago that he had secured funding to make Tesla private — may have violated SEC disclosure rules. He collected a stake in Twitter earlier this year.
The source added that Twitter is also considering whether regulators in any of its major markets would oppose Musk’s ownership of the company. If Twitter proves a sale to Musk would be too risky, it could charge a large breakup fee, according to sources.
social media company Take a poisonous pill After Musk made his bid, to prevent him from raising his more than 9% stake in the company above 15% without negotiating a deal with the board of directors. In response, Musk threatened to release a tender offer that he could use to score shareholder support for his bid.
One concern that Twitter’s board has taken into account, the sources said, is that unless it seeks to negotiate a deal with Musk, several shareholders could support him in a bidding process. While the toxic pill would prevent them from going public, the company was concerned that its negotiating hand would be significantly weakened if it proved to be against the will of many of its investors.
Representatives for Twitter and Musk did not immediately respond to requests for comment.