Twitter is re-examining Elon Musk’s offer, and he may be more receptive to the deal

Twitter company

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Elon MuskA billionaire was offered a $43 billion takeover after the billionaire raised the financing for the offer, a sign that the social media company could be more receptive to the deal.

Twitter was expected to reject the site Presentation made by Mr. Musk earlier this month without making clear how he would pay for it. But after it was revealed last week now $46.5 billion in financingPeople familiar with the matter said Twitter is taking a fresh look at the offer and is more likely than ever to seek negotiation. The situation is fast-moving and it’s still far from a guarantee that Twitter will do so.

Twitter is still working on a critically important estimate of its own value, which should be close to Mr. Musk’s offer, and it can also insist that localities like Mr. Musk agree to cover break-up safeguards should the deal collapse. Some people said.

People said the two sides are meeting on Sunday to discuss Mr. Musk’s proposal.

People said Twitter is expected to weigh up the supply when it reports first-quarter earnings Thursday, if not sooner. Twitter’s response won’t necessarily be in black and white, and could leave the door open to inviting other bidders or negotiating with Mr. Musk on terms other than price. Mr. Musk assured Twitter Chairman Brett Taylor in recent days that he would not compromise his offer of $54.20 per share, People said.

The potential change by Twitter comes after Musk met privately Friday with several of the company’s shareholders to extoll the merits of his proposal while repeating that the board has a “yes or no” decision, according to people familiar with the matter. Subject. Whether or not his attempt is successful, they said, he has also vowed to resolve free speech issues that he sees have plagued the platform and the state more broadly.

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The CEO made his offer to select shareholders in a series of video calls, focusing on actively managed funds, people said, in the hope that they could influence the company’s decision.

Mr. Musk said he does not see any way Twitter management can make the stock its bid price on its own, given the problems at work and an ongoing inability to correct them. It can’t be known if he made it clear what specific steps he would take, even though he tweeted that he wanted to Reduce the platform’s reliance on adsas well as making simpler changes like allowing longer tweets.

Mr. Musk already has some shareholders rallying behind him after the meetings. Laurie Brunner, who runs the massive growth fund for Thrivent Asset Management LLC, sees Mr. Musk as a skilled operator. “He has a proven track record at Tesla,” she said. “It is the catalyst for delivering strong operational performance at Twitter.” Minneapolis-based Thrivent owns about 0.4% of Twitter worth $160 million and is also a shareholder in Tesla.

Mr. Musk has already said he is considering taking his bid directly to shareholders by putting out a bid offer. Even if it gets a lot of shareholder support in a tender offer – which is far from guaranteed – it is You’ll still need a way to beat it The company’s toxic pill, a legal gambit it employed effectively prevents him from building his stake to 15% or more.

Elon Musk has already said that he is considering passing his bid directly to shareholders by launching a bid offer.


Miguel Roberts/Brownsville Herald/Associated Press

One of the tactics often used to push the bid, and to seek control of the target board, is out of reach at the moment. Twitter administrators have overlapping terms, which means that a dissident contributor would need several years to gain control rather than a single contributor vote. Twitter last year tried to phase out overlapping board terms because it resented the corporate governance community, but not enough shareholders voted on the measure. The company is trying to do it again at this year’s annual meeting scheduled for May 25. Only two directors are about to be re-elected, and it’s too late for Mr. Musk to run.

Twitter shares have traded below the offer price since it submitted the bid on April 14, usually a sign that shareholders are skeptical that a deal can happen, although they closed nearly 4% on Friday at $48.93, the day after it announced the funding. Deal . He indicated that if the current bid fails, he can sell his more than 9% stake.

The funding included more than $25 billion in debt owed by nearly every global investment bank, with the exception of these two banks that advise Twitter. The rest was $21 billion in stock that Musk would make available to himself, likely by selling existing stakes in his other businesses such as Tesla. The speed with which funding and market selling have combined in recent days – making the all-money offer appear relatively more attractive – likely contributed to Twitter’s willingness to accept Mr. Musk’s proposal.

As Elon Musk tries to buy Twitter, the Wall Street Journal is looking back at previous Twitter suitors, such as Salesforce, Disney and Alphabet. Technical reporter Tim Higgins explains why previous talks failed and what’s different this time. Illustration: Nikki Walker

Jeff Gram, a portfolio manager at Bandera Partners LLC, a New York hedge fund with about $385 million under management, said Twitter’s board should take on Mr Musk because its stock “hasn’t gone anywhere” since the company went public eight years ago. . The company last bought Twitter shares last February, and it owns about 950,000 shares in total, which represents about 11% of its portfolio.

Mr. Gram said the Twitter board could not walk away from Mr. Musk’s offer without offering an alternative that delivers real value to shareholders. “I’m not sure what that could be at this point besides finding a higher bid,” he said.

write to Cara Lombardo at [email protected]

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