Musk: Twitter takeover talks and Musk enter final round
The social media company is working to work out the terms of a deal and could reach an agreement as early as Monday if negotiations go smoothly, according to the people, who asked not to be identified because the information is private. Musk is in the process of finding partners for the acquisition and continues to talk to potential co-investors, one of the people said. The situation is fluid and the talks could drag on or collapse.
Twitter’s board of directors was negotiating with the CEO of billionaire Tesla Inc on Sunday over the terms of his unsolicited offer to buy Twitter for $54.20 a share, and talks continued into the night until the first Monday hours, the people said. Shares of Twitter gained 5.9% to $51.81 in New York at press time.
Twitter began preparing for a potential deal after Musk revealed a funding plan that included backing from Morgan Stanley and other institutions.
Musk’s planned offer values Twitter at around $43 billion based on the number of outstanding shares listed in its annual report. Twitter representatives declined to comment on the status of the talks, and Musk did not immediately respond to requests for comment.
Although many details are yet to be ironed out and events are unfolding quickly, what initially seemed like a long-term deal seemed closer to becoming a reality.
Started raising shares in January
Musk, who has more than 83 million Twitter followers, began accumulating shares in the company in January, revealing a 9% stake earlier this month. That post invited him to join Twitter’s board, an offer he ultimately rejected, only to turn around on April 14 with an unsolicited offer to buy the company and take it private.
His proposal was met with skepticism on Wall Street because, although he said it was his “best and last” offer, it lacked funding details. Even though Musk is the richest person in the world, much of his fortune is tied to Tesla stocks.
Twitter adopted a poison pill as a measure to prevent Musk from buying more than 15% of the company, while giving the board more time to consider his offer and plan his next move.
Late last week, Musk gave more details about his financing plans, saying in a headlines filing that he had lined up Morgan Stanley and other lenders, which were offering $13 billion in debt financing more An additional $12.5 billion in loans against its stock in Tesla, as well as pledging to bring in an additional $21 billion of its own money through equity financing. It’s unclear whether Musk, who runs Tesla and Space Exploration Technologies Corp., would consider selling some of his stake in one of his prized companies to acquire Twitter.
He currently has about $3 billion in cash or other somewhat liquid assets after spending $2.6 billion to buy his stake in Twitter, according to Bloomberg calculations. Several potential partners have approached Musk to participate in the equity financing, people familiar with the talks said.
In a whirlwind of news in just over two weeks, it’s been unclear whether Musk, 50, will follow up on his offer. Musk is a prolific tweeter – posting a mix of memes, questions and barbs – and is committed to turning Twitter into a bastion of free speech. But a previous claim that he secured financing to take Tesla private, an episode that prompted a U.S. Securities and Exchange Commission lawsuit, cast a shadow over his offer on Twitter.