Twitter Begins Deal Negotiations With Tesla Boss Musk: Report
Social Media giant,Twitter Inc has kicked off deal negotiations with Elon Musk after he wooed many of the social media company’s shareholders with financing details on his $43bn acquisition offer.
THECONSCIENCENG reports that the company’s decision to engage with Musk, taken earlier on Sunday, does not mean that it will accept his $54.20 per share bid, the sources said. It signifies, however, that Twitter is now exploring whether a sale of the company to Musk is possible on attractive terms, the sources added.
Musk, chief executive of electric car giant Tesla Inc, has been meeting with Twitter shareholders in the last few days, seeking support for his bid. He has said Twitter needs to be taken private to grow and become a genuine platform for free speech.
Many Twitter shareholders reached out to the company after Musk outlined a detailed financing plan for his bid on Thursday and urged it not to let the opportunity for a deal slip away, Reuters reported earlier on Sunday.
Musk’s insistence that his bid for Twitter is his “best and final” has emerged as a hurdle in the deal negotiations, the sources said. Nevertheless, Twitter’s board has decided to engage with Musk to gather more information on his ability to complete the deal, and potentially get better terms, the sources added.
Twitter has not yet decided if it will explore a sale to put pressure on Musk to raise his bid, according to the sources. The people with knowledge of the matter declined to be identified because the deal discussions are confidential.
Twitter wants to know more about any active investigations by regulators into Musk, including by the US Securities and Exchange Commission (SEC), that would present a risk to the deal being completed, one of the sources said.
Securities lawyers say that Musk, who settled charges that he misled investors by suggesting four years ago he had secured funding to take Tesla private, may have breached SEC disclosure rules as he amassed a stake in Twitter earlier this year.
Twitter is also looking into whether regulators in any of the major markets it operates would object to Musk owning the company, the source added. Were Twitter to establish that a sale to Musk would be risky, it could ask for a sizeable break-up fee, according to the sources.
The social media company adopted a poison pill after Musk made his offer to prevent him from raising his more than 9 percent stake in the company above 15 percent without negotiating a deal with its board. In response, Musk has threatened to launch a tender offer that he could use to register Twitter shareholder support for his bid.
