Twitter shareholders when into revolt this weekend over the company not selling the whole enchilada of the social media platform to billionaire tech mogul Elon Musk for $43 billion so that he could take it private and turn the company into another of his very expensive toys and are now openly forcing the company to reconsider the offer.
Twitter Inc (TWTR.N) is coming under increasing pressure from its shareholders to negotiate with Elon Musk even though the world's richest person has called his $43 billion bid for the social media platform his best and final offer, people familiar with the matter said on Sunday.
While the views of Twitter shareholders vary over what a fair price for a deal would be, many reached out to the company after Musk outlined his acquisition financing plan on Thursday and urged it not to let the opportunity for a deal slip away, the sources said, speaking on condition of anonymity. read more
Twitter's board is expected to find that Musk's all-cash $54.20 per share offer for the company is too low by the time it reports quarterly earnings on Thursday. Nonetheless, some shareholders who agree with that stance still want Twitter to seek a better offer from Musk, whose net worth is pegged by Forbes at $270 billion, the sources told Reuters.
One option available to Twitter's board is to open its books to Musk to try to coax him to sweeten his bid. Another would be to solicit offers from other potential bidders. While it is not yet clear which path Twitter will take, it is increasingly likely that its board will attempt to solicit a better offer from Musk even as it rebuffs the current one, the sources said.
"I wouldn't be surprised to wake up next week and see Musk raise what he called his best and final offer to possibly $64.20 per share," one of the fund managers who is invested in Twitter said on condition of anonymity to discuss private conversations with the company.
"He could also drop the whole thing entirely. Anything is possible," the fund manager said about Musk's offer.
Twitter shares closed at $48.93 on Friday, a significant discount to Musk's offer that reflects the uncertainty over his bid's fate.
Twitter Inc. TWTR 3.93% is re-examining Elon Musk’s $43 billion takeover offer after the billionaire lined up financing for the bid, in a sign the social-media company could be more receptive to a deal.
Twitter had been expected to rebuff the offer, which Mr. Musk made earlier this month without saying how he would pay for it. But after he disclosed last week that he now has $46.5 billion in financing, Twitter is taking a fresh look at the offer and is more likely than before to seek to negotiate, people familiar with the matter said. The situation is fast-moving and it is still far from guaranteed Twitter will do so.
Twitter is still working on an all-important estimate of 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.
The two sides are meeting Sunday to discuss Mr. Musk’s proposal, the people said.
Twitter is expected to weigh in on the bid when it reports first-quarter earnings Thursday, if not sooner, the people said. Twitter’s response won’t necessarily be black-and-white, and could leave the door open for inviting other bidders or negotiating with Mr. Musk on terms other than price. Mr. Musk reiterated to Twitter’s chairman Bret Taylor in recent days that he won’t budge from his offer of $54.20-a-share, the people said.
The potential turnabout on Twitter’s part comes after Mr. Musk met privately Friday with several shareholders of the company to extol the virtues of his proposal while repeating that the board has a “yes-or-no” decision to make, according to people familiar with the matter. He also pledged to solve the free-speech issues he sees as plaguing the platform and the country more broadly, whether his bid succeeds or not, they said.
We'll see where this goes, but odds are in Musk's favor. If he does pull this off, Twitter is going to be a very different place very quickly, and the changes are not going to be for the better.
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