Twitter may be getting closer 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 funding his offer last week, two people said. with knowledge of the situation. The funding marked a turning point for how Twitter’s board saw Mr. Musk’s bid of $54.20 a share, which allowed the company’s 11 board members to seriously consider his offer, the people said.
The Twitter board planned to meet with Musk’s side later on Sunday to discuss other outlines around a potential deal, the people said, speaking on condition of anonymity as they were not authorized to discuss confidential information. Those details included a timeline to close every possible deal and any fees that would be paid if an agreement was signed and then fell apart.
A deal remains far from certain, but the willingness of the Twitter board to get in touch with Mr. Musk, the world’s richest man, is a step forward. Mr. Musk, who has more than 83 million followers on Twitter and began amassing shares in the company earlier this year, stated on April 14 that he plans to buy the company 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 do the deal. Twitter also adopted a “poison pill,” a defensive maneuver that would prevent Mr. Musk from accumulating more shares of the company.
Mr. Musk updated his proposal last week and pressured Twitter to consider his offer more seriously. In a securities filing released Thursday, Mr. Musk described how he had put together financing from the 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 share. at Tesla, the electric car manufacturer he runs. He was expected to add about $21 billion in equity financing.
What appeared to be a highly unlikely deal is now more likely. The situation with Twitter and Mr. Musk remains fluid and fast, those with knowledge of the situation said.
A Twitter spokesperson declined to comment. In previous public statements, the company had said the board would “continue to conduct a careful, comprehensive and considered assessment to determine the course of action 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 previously reported on Twitter’s increased responsiveness to Mr. Musk’s offer.
Wall Street would likely view Twitter’s board of directors’ openness to Mr. Musk’s offer as “the beginning of the end for Twitter as a publicly traded company, with Musk now likely on track to take over the company unless a second bidder comes into the mix,” Dan Ives, an analyst with Wedbush Securities, wrote in a note Sunday.
Musk’s bid on Twitter is a 54 percent premium to the stock price the day before he began investing in the company in late 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 to only accept an offer it valued at a minimum of $60 a share. Twitter’s stock soared above $70 a share last year when the company announced targets to double its earnings, but has since fallen to around $48 as investors questioned its ability to meet those targets.
Mr 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 free speech around the world” and that it will require massive improvements in its product and policies.
Mr. Musk has attempted to negotiate with Twitter through the service itself, threatening in several tweets that he would take his offer directly to the company’s shareholders in what has been called a “tender offer.” A takeover bid is a hostile maneuver in which an outside party circumvents a company’s governance by asking shareholders to sell their shares directly to them.
He has also acted erratically on the platform, expressing concerns about how he might manage the service if he were in charge of it. On Saturday, mr. musk took aim at billionaire Bill Gates, saying that Mr. Gates had taken a “short” position in Tesla’s stock, meaning Mr. Gates was betting the automaker’s shares would fall. On Sunday, Mr. Musk tweeted that he “continueof ridiculing Mr. gates.
What will happen to Elon Musk’s bid on Twitter?
The offer. Elon Musk, the world’s richest man, made an unsolicited offer of more than $43 billion for the social media company. Mr. Musk said he wanted to turn Twitter into a private business and that he wanted people to be able to speak more freely about the service.
Still, Mr. Musk maintains friendly ties with a number of high-ranking members of Twitter. Over the weekend, Mr. Musk exchanged friendly tweets with Jack Dorsey, the company’s co-founder and board member. Mr. Dorsey stepped down as CEO of Twitter in November and will soon be leaving the board of directors.
Both men share similar views on cryptocurrencies and on promoting more freedom of expression online. When mr. Musk briefly flirted this month to join the Twitter board, said Mr. Dorsey tweeted“I’m really excited to have Elon join the Twitter board! He cares deeply about our world and Twitter’s role in it.”
On Friday, Block, a financial services firm headed by Mr Dorsey, announced that he had changed his title at the company from chief executive to “Block Head”. That shift seemed to resonate with Mr. musk.
“Your new title at Block is fire,” Mr Musk tweeted to Mr Dorsey on Saturday, using two flame emojis to indicate his approval. Last year, Mr. Musk had changed his title at Tesla from chief executive to technoking.
