On Monday morning, the company’s 11-member board were talking with Mr Elon Musk about his bid to purchase the giant social networking service and take it private.
According to two people familiar with the matter, Twitter is close to agreeing to sell itself to Elon Musk, the founder of Tesla, in a move that would bring the world’s richest man and the best influential social networking site together. Earlier today, the board of Twitter was negotiating with Mr Musk about his unexpected attempt to purchase Twitter for $46.5 Billion. The two parties were discussing issues such as a deadline for closing the prospective deal and any costs that would be paid if an agreement was signed but then fell apart later.
The negotiating talks came after a Twitter board meeting on Sunday morning to explore Mr Musk’s offer. The people associated with the talks said that getting finance commitments from Mr Elon Musk changed the way the board looked at Mr Musk’s $54.20 per share offer, allowing the company’s 11 board members to seriously examine it.
In premarket trading, Twitter’s shares increased 2% to around $50 per share.
The agreement isn’t complete yet, and it may fall apart at any time, but what had looked like an unlikely accord was getting closer to fruition. The scenario involving Twitter and Mr Musk is still fluid and fast-moving, according to sources familiar with the matter.
Mr Musk, who has over 83 million Twitter followers and began buying Tesla stock earlier this year, announced his intention to acquire the firm and take it private on April 14. However, Wall Street promptly disregarded his plan since it was uncertain whether he would be able to get the necessary funds. Twitter had implemented a “poison pill,” a defensive strategy aimed at preventing Mr Musk from amassing additional shares in the firm.
Last Monday, Mr Musk amended his proposal, increasing the pressure on Twitter to take his offer more seriously. Mr Musk explained how he had pulled together funding from Morgan Stanley and a group of other lenders, who were giving $13 billion in debt financing, plus another $12.5 billion in loans against his shares in Tesla, the electric carmaker he owns, he was projected to raise $21 billion in stock capital.
Mr Musk’s bid for Twitter is 54% higher than the share 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 Mr Musk’s offer.
Several analysts 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 has since plummeted to approximately $48 as investors doubted the company’s capacity to reach those ambitions.
Mr Musk, 50, has stated his dissatisfaction with Twitter as a social media platform. He has stated that he intends to “convert” the firm into a “platform for free speech throughout the world,” which will necessitate significant changes to the company’s product and rules.
The decision is yet to come, we’ll soon get to know if the decision is in favour of Mr Elon Musk or against it!
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