Inside information indicates that social media company Twitter inc. is seriously considering Elon musk’s offer for a total acquisition. According to a report, the company is in the final stretch of negotiations for a $43 billion sale to the Tesla CEO.
Musk made an offer for a total buyout early last week for what may be one of the biggest-ever leveraged buyouts of a listed company if the deal falls through. According to the report, the details of the transaction remain private owing to requests for anonymity by parties participating in the process.
According to Bloomberg, discussions between the South African billionaire and Twitter’s board about a possible takeover at $54.20 per share continued into the early hours of Monday (today) and a close may be on the horizon. In the wake of the speculations, Twitter share prices have jumped 3.9% to $50.84 as trading got underway in New York.
Musk had earlier revealed the financial plan of a partnership with the top investment firm, Morgan Stanley as well as other institutions to complete the deal, which very much sent a wave of optimism that the deal would be possible.
Reports from the New York Times indicate that the company’s 11-member board met with Musk to discuss his offer to buy the social networking service and take it private.
Representatives for Twitter and Musk didn’t immediately respond to requests for comment. The Wall Street Journal reported earlier that the parties could reach an agreement as soon as this week, citing unidentified people.
How it all started
The news of an imminent takeover follows from months of Musk’s clamour on the social media platform for the respect and entrenchment of individuals’ fundamental human rights to free speech.
He claimed that the platform which was much like a “de facto public town square” ought to adhere to free speech principles and not undermine democracy. According to the serial entrepreneur, the social media company needs to go private because it can “neither thrive nor serve” free speech in its current state. Then, he asks for public opinion on the next actions.
Becoming majority shareholder
Musk quickly followed his successive tweets on the platform about his intention to own a platform similar to Twitter with an unexpected purchase of a 9.2% stake in Twitter (four times higher than that of Twitter founder Jack Dorsey) and making him the highest shareholder of the company.
In what would be a resultant effect of the purchase of shares in the company and being the highest shareholder, Twitter announced that Musk was set to become part of the board of directors, welcoming his ideas and initiatives on revamping the platform.
Elon Musk’s offer shows that he has very little confidence in current management and does not believe he can drive the necessary change while Twitter is still public, particularly its free speech policies. Now we know the reason behind Musk’s refusal to join the board.JESSE COHEN, SENIOR ANALYST AT INVESTING.COM
However, in what could be a surprising u-turn, Musk rejected the offer and instead submitted a bid which would see him acquire the company outrightly, offering to buy the company at a price of $54.20 per share.
Prior to this development, some market analysts had earlier predicted that the company would not accept the offer, thus resulting in a hostile situation in which Mus might want to force the outcome.
“Given the likelihood that Twitter’s board will reject the offer, the question then becomes whether Musk would want to perform a hostile takeover of the company”. – Jesse Cohen
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!