According to two people familiar with the situation, the board of the social media service met Sunday morning to discuss Musk’s unsolicited $46.5 billion bid to buy the company, which he began lining up financing for last week. According to the people, the financing changed the way Twitter’s board viewed Musk’s bid of $54.20 per share, allowing the company’s 11 board members to seriously consider his offer.
Last Monday, Musk upgraded his proposal, putting pressure on Twitter to take his offer more seriously. Musk outlined how he had pulled together financing from 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 equity in Tesla, the electric carmaker he oversees, in a regulatory filing made public Thursday. He was projected to raise $21 billion in stock capital.
What appeared to be a highly implausible arrangement is now becoming more likely. According to those familiar with the matter, the scenario involving Twitter and Musk is still fluid and fast-moving.
A Twitter spokeswoman did not respond to a request for comment. The company’s board had previously stated that it was “continuing to conduct a careful, comprehensive, and deliberate review to determine the course of action in the best interest of the company and all Twitter stockholders” in previous public statements.
A attempt for response from Musk went unanswered. Twitter’s greater receptivity to Musk’s bid was previously reported by the Wall Street Journal.
The openness of Twitter’s board to Musk’s bid was likely to be viewed by Wall Street as “the beginning of the end for Twitter as a public company, with Musk likely now on a path to acquire the company unless a second bidder comes into the mix,” according to Dan Ives, an analyst at Wedbush Securities.
Musk’s offer for Twitter is 54% higher than the stock’s price the day before he started investing in the firm in late January. For much of last year, though, Twitter’s stock was trading higher than Musk’s offer.
Several observers predicted that Twitter’s board of directors would only approve a proposal worth at least $60 per share. When Twitter declared plans to double its revenue last year, its stock soared above $70 a share, but it has since dropped to approximately $48 as investors doubted the company’s capacity to reach those ambitions.
Musk, 50, has stated his dissatisfaction with Twitter as a social media platform. He has stated that he intends to “convert” the company into a “platform for free expression around the world,” which will necessitate significant changes to the company’s product and policies.
Musk has attempted to negotiate with Twitter through the service itself, threatening in several tweets that he might make a “tender offer” to the company’s shareholders. A tender offer is a hostile tactic in which an outside entity asks shareholders to sell their shares directly to them, bypassing the company’s board of directors.