Twitter prepares to accept Musk’s $43 billion offer

New York (Reuters) – Twitter Inc (TWTR.N) It is about to agree to a sale to Elon Musk for $43 billion in cash, a price the Tesla CEO has described as his “best and last” offer to the social media company, people familiar with the matter said.

Twitter may announce a deal worth $54.20 per share later on Monday once its board of directors meets to recommend the deal to Twitter shareholders, the sources said, adding that the deal could still collapse at the last minute.

Musk, the world’s richest person according to Forbes, is negotiating to buy Twitter in his personal capacity and Tesla (TSLA.O) Do not participate in the transaction.

Register now to get free unlimited access to Reuters.com

The sources said that Twitter has not yet been able to secure a “go-shop” clause under its agreement with Musk that would allow it to solicit other bids once the deal is signed. However, the sources added, Twitter will be allowed to accept an offer from a third party by paying a breakup fee to Musk.

The sources asked not to be identified as it is a matter of confidentiality. Twitter and Musk did not immediately respond to requests for comment.

Twitter shares were up 4.5% in premarket trading in New York at $51.15.

Musk, a prolific Twitter user, said he should be seen as private to grow and become a true platform for free speech.

The 50-year-old businessman, who is also the CEO of rocket developer SpaceX, said he wants to combat trolls on Twitter and has proposed changes to the premium subscription service Twitter Blue, including lowering its price and blocking ads.

See also  Bob Lee, creator of the Cash app and former CTO of Square, has been stabbed to death

The billionaire, who is a staunch advocate of cryptocurrency, also suggested adding dogecoin as a payment option on Twitter.

He has said that Twitter’s current leadership team is unable to make the company’s stock at its offer price on its own, but he hasn’t said it needs to be redeemed.

“The company will not thrive and will not serve this societal necessity in its current form,” Musk said in his presentation letter last week.

Up until the point when Musk revealed a stake in Twitter in April, the company’s shares had fallen about 10% since Parag Agrawal took over as CEO from founder Jack Dorsey in late November.

The deal, should it happen, would come just four days after Musk unveiled a financing package to support the acquisition.

This led Twitter’s board of directors to take its offer seriously and made several shareholders ask the company not to let the opportunity for a deal go to waste, Reuters reported on Sunday. Sources said that before Musk revealed the funding package, Twitter’s board was expected to reject the offer. Read more

The sale would represent Twitter’s acknowledgment that Agrawal is not generating enough momentum in making the company more profitable, even though it is on track to meet the ambitious financial goals the company set for 2023. Twitter shares were trading above Musk’s bid price as recently as November.

Musk revealed his intention to buy Twitter on April 14th and consider it private via a funding package consisting of equity and debt. Wall Street’s biggest lenders, except for those advising Twitter, have committed to offering debt financing.

See also  Gas prices soaring: Local headlines across the country highlight pain at the pump

Musk’s negotiating tactics – making and sticking to one offer – are similar to how another billionaire, Warren Buffett, negotiates acquisitions. Musk did not provide any financing details when he first revealed his offer to Twitter, which left the market skeptical about his prospects.

Register now to get free unlimited access to Reuters.com

(New York’s Greg Romeliotis reports, additional reporting by Crystal Hu); Editing by Mark Potter

Our criteria: Thomson Reuters Trust Principles.

Leave a Reply

Your email address will not be published. Required fields are marked *