Twitter may be moving closer to a deal with Elon Musk.
The board of the social media service met on Sunday morning to discuss After Musk’s unsolicited $ 46.5 billion bid to buy the company, he began lining up his offer for financing last week, two people with knowledge of the situation said. The financing was a turning point for how Twitter’s board viewed Mr. Musk’s bid of $ 54.20 a share, enabling the company’s 11 board members to seriously consider his offer, the people said.
Twitter’s board planned to meet with Mr. Musk’s side later on Sunday discussed a potential deal around other contours, said the people, who spoke on condition of anonymity because they were not authorized to discuss confidential information. Those details include a timeline close to any potential deal and any fees that would have been paid if an agreement was signed and then fell apart.
Any deal is far from certain, but the willingness of Twitter’s board to engage with Mr. Musk, the richest man in the world, represents a step forward. Mr. Musk, who has more than 83 million followers on Twitter and started amassing shares in the company earlier this year, announced his announcement to buy the company on April 14 and take it private. But his proposal was quickly dismissed by Wall Street because it was unclear if he could come up with the money to make the deal. Twitter also adopted a “poison pill,” a defensive maneuver that would prevent Mr. Musk accumulates more than the company’s stock.
Mr. Musk updated his proposal last week, putting pressure on Twitter to consider his bid more seriously. In a securities filing on Thursday, Mr. Musk detailed how he had put together financing from the investment bank Morgan Stanley and a group of other lenders, who were offering $ 13 billion in debt financing, plus another $ 12.5 billion in loans against his stock in Tesla, the electric carmaker that he runs. He was expected to add about $ 21 billion in equity financing.
Now what appeared to be a highly improbable deal may be more probable. The situation involving Twitter and Mr. Musk is fluid and fast-moving, with people saying the situation of knowledge.
A Twitter spokesperson declined to comment. In previous public statements, the company said its board was “continuing to conduct a careful, comprehensive and deliberate review of the course’s actions in the best interest of the company and all Twitter stockholders.”
Mr. Musk did not respond to a request for comment. The Wall Street Journal previously reported Twitter’s increased receptivity to Mr. Musk’s bid.
Wall Street was on the lookout for Twitter’s board Musk’s bid as “the beginning of the end for Twitter as a public company with Musk likely to acquire a path to a company unless a second bidder comes in the mix,” Dan Ives, an analyst at Wedbush Securities, wrote on a note. Sunday.
Mr. Musk’s offer for Twitter is a 54 percent premium over the share price before he starts 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 accept only a bid that valued it at a minimum of $ 60 a share. Twitter’s stock rose above $ 70 a share last year when the company announced goals to double its revenue, but has since fallen to around $ 48 as investors have questioned its ability to meet those targets.
Mr. Musk, 50, has made it clear he sees many deficiencies in Twitter as a social media service. He has said that he wants to “transform” the company as a “platform for free speech around the globe” and that it requires vast improvements in its product and policies.
Mr. Musk has tried to negotiate with Twitter using the service itself, threatening several tweets that he may take his bid directly to the company’s shareholders in what is called a “tender offer.” A tender offer is a hostile maneuver in which an outside party circumvents a company’s board asking shareholders to sell their shares directly to them.
He also acted erratically on the platform, raising concerns over how he might manage the service he should be in charge of. On Saturday, Mr. Musk Bill Gates took aim at the billionaire because Mr. Gates had taken a “short” position on the stock of Tesla, which meant that Mr. Gates was betting the carmaker’s shares would fall. On Sunday, Mr. Musk tweeted that he was “moving on”From making fun of Mr. Gates.
What’s Happening With Elon Musk’s Bid for Twitter?
The offer. Elon Musk, the richest man in the world, made an unsolicited bid worth more than $ 43 billion for the social media company. Mr. Musk said he wanted to make Twitter a private company and that he wanted people to be able to speak more freely on the service.
Even so, Mr. Musk maintains amicable ties with some high-ranking members of Twitter. Over the weekend, Mr. Musk traded friendly tweets with Jack Dorsey, co-founder of the company and a board member. Mr. Dorsey stepped down as Twitter’s chief executive in November and will be leaving its board soon.
Both men share similar views on cryptocurrencies and promoting more free speech online. When Mr. Musk briefly flirted with joining Twitter’s board this month, Mr. Dorsey tweeted, “I’m really happy Elon is joining the Twitter board! He cares deeply about our world and Twitter’s role in it. “
On Friday, Block, a financial services company led by Mr. Dorsey, announced that he had changed his title at the firm’s chief executive to “Block Head.” That shift appeared to resonate with Mr. Musk.
“Your new title at Block is fire,” Mr. Musk tweeted at Dorsey on Saturday, using two flame emojis to signify his approval. Last year, Mr. Musk had changed his title at Tesla from chief executive to technoking.