Twitter is re-examining the takeover proposal Elon Musk earlier submitted and may negotiate a potential terms of sale with the billionaire.
According to fresh reports, Twitter Inc (NYSE: TWTR) is now receptive to the $43 billion takeover bid proposed by Elon Musk. The social media giant’s new disposition comes after the brash billionaire disclosed that he had secured $46.5 billion in financing.
After Musk offered to buy Twitter outrightly, the general assumption was that the microblogging platform would not sell. However, it now seems that the company’s executives are willing to reconsider the offer. Pursuant to this development, both sides are meeting on Sunday to negotiate a deal, according to inside sources. Although the situation is fast-moving, it is also worth noting that there is no guarantee both parties will reach a deal.
Sources also state that Twitter is still working on coming up with an estimation of its own value. In any eventuality, the Jack Dorsey-founded platform would need to estimate a sale value close to Musk’s offer. In addition, the social media company may also insist on guarantees from the Tesla (NASDAQ: TSLA) chief executive. Such guarantees include Musk agreeing to cover breakup protections should the deal fall apart.
Twitter, which looks to report its Q1 earnings this Thursday, might also use that opportunity to weigh in on Musk’s bid. Furthermore, the social media giant could also discuss the intricacies of the deal earlier than Thursday.
More Insight into the Musk Twitter Takeover Bid
Although Twitter appears set to do business with Musk, its response would not necessarily be in black-and-white. In addition, the company may also extend a sale invitation to other bidders. Furthermore, Twitter could choose to negotiate with Musk on terms outside of the sale price. However, the Tesla CEO was clear in his offer letter that he would not sway from his initial proposed sale price of $54.20-a-share.
Last Friday, Musk met privately with several Twitter shareholders in a bid to persuasively sell them on his offer. In addition, the world’s richest man also glorified the virtues of his proposal, especially that of ‘free speech.’ Musk also said he would still try to remove hindrances to free speech whether or not his takeover bid succeeds.
In his pitch to select shareholders, Musk also honed in on actively managed funds as a way to sway a decision in his favor. According to Musk, Twitter management was incapable of getting the stock to his offer price on its own. He further explained that this was due to issues in the business and a persistent inability to correct them.
Musk’s propaganda to the Twitter shareholders also included reducing the platform’s reliance on advertising, and permitting lengthier tweets.
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Since Musk proposed to buy Twitter, the social media platform’s shares have been trading below his offer price. This may point to the level of shareholder skepticism that a deal will occur. Musk also previously stated that he could sell his own 9% Twitter stake if his current bid fails.
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