Image: REUTERS/Dado Ruvic
Twitter is revisiting Elon Musk's $43 billion takeover bid after it confirmed funding for the offer. This is a sign that the social network may be more willing to deal with the Tesla CEO.
In mid-April, Tesla CEO Elon Musk offered to buy the remaining shares of Twitter he does not already own at $54.20 per share, more than $43 billion. But Twitter has activated the poison pill strategy and has yet to give a definitive answer on his takeover bid. However, after Musk revealed last week that he had $46.5 billion in funding, Twitter has taken a fresh look at the proposal, per The Wall Street Journal. According to information from people familiar with the matter, the platform's board is now more likely than before to seek negotiations.
Twitter is reportedly still working on estimating its own value, “which would need to come in close to Mr. Musk's offer, and it could also insist on sweeteners such as Mr. Musk agreeing to cover breakup protections should the deal fall apart, some of the people said,” wrote the WSJ. The two sides are due to meet on Sunday to discuss Musk's proposal, the people said.
The potential turnaround from Twitter came after Musk held a private meeting with several of the company's shareholders on Friday to give them more details about his offer. The head of Tesla has reportedly vowed to address the free speech issues he believes are plaguing the platform and the country as a whole, whether his proposal succeeds or not.
“Musk said he sees no way Twitter management can get the stock to his offer price on its own, given the issues in the business and a persistent inability to correct them,” writes the WSJ.
The head of Tesla already has the support of some shareholders. Lauri Brunner, who manages Thrivent Asset Management LLC’s large-cap growth fund, considers Musk as a skilled operator. “He has an established track record at Tesla,” she said. “He is the catalyst to deliver strong operating performance at Twitter.” Thrivent has a roughly 0.4% stake in Twitter worth $160 million and is also a Tesla shareholder.
Musk has also already said that he is considering submitting his bid directly to shareholders with a tender offer. He is convinced that the board of directors of Twitter makes a decision without taking into account the real interests of shareholders.
In addition, a group of 18 Republicans in the House of Representatives asked the Twitter board to keep all records related to Musk's offer to buy the company. Republicans on the House Judiciary Committee asked Twitter Board Chairman Bret Taylor and other members of the board to preserve any messages from official or personal accounts, including through encryption software, that relate to Twitter's consideration of Musk's offer. This could push the board to be more attentive to the interests of Twitter's shareholders.
Twitter's board should interact with Musk, as he owns a 9.1% stake in the company. Jeff Gramm, a portfolio manager with Bandera Partners LLC, said Twitter's board could not reject Musk's offer without providing an alternative that would deliver real value to shareholders. “I’m not sure what that can be at this stage besides finding a higher bid,” he said.
© 2022, Eva Fox | Tesmanian. All rights reserved.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.