According to individuals familiar with the issue, one of Elon Musk’s “best and final” bids for the social media business is expected to be accepted by Twitter (TWTR.N).
According to the sources, Twitter may announce the $54.20-per-share agreement later on Monday after its board of directors has convened and recommended it to Twitter shareholders. However, the deal might yet fall apart at the last moment.
Although Musk is the world’s richest man, Tesla (TSLA.O) is not participating in the negotiations to purchase Twitter.
According to the individuals cited by the New York Times, a “go-shop” clause in Twitter’s agreement with Musk has failed to materialise. According to the sources, Twitter might still pay a break-up fee to accept an offer from another party.
Because the topic is secret, the sources requested anonymity. Requests for a response from both Twitter and Musk went unanswered right away.
Pre-market trade in New York saw Twitter shares rise 4.5% to $51.15.
What does Elon Want to Do With Twitter?
On Twitter, Tesla CEO Elon Musk frequently tweets. And he has argued that the site needs to be kept private to thrive.
The 50-year-old entrepreneur and SpaceX CEO Elon Musk want to battle trolls on Twitter by cutting the price of the premium membership service and prohibiting advertising. He has also recommended adjustments to the Twitter Blue service.
The billionaire, an outspoken admirer of cryptocurrencies, has requested that dogecoin be included as a payment option on his Twitter account.
As of now, he hasn’t claimed that Twitter’s current leadership team is incompetent enough to raise the company’s stock to his offer price on its own.
This societal imperative can’t be served by Tesla in its existing form. Musk said in an offer letter last week.
Twitter’s stock had plummeted by around 10% since founder Jack Dorsey’s successor, Parag Agrawal, took over as CEO in late November. Just before Musk made his interest in the firm public in April.
Four days after Musk announced a funding package to support the acquisition, the deal. If it goes through, it would be a significant milestone.
Reuters said on Sunday that Twitter’s board took his offer more seriously. And several shareholders urged the firm not to miss out on a transaction. Sources had predicted that Twitter’s board would reject the bid before Tesla CEO Elon Musk disclosed the financial arrangement.
Isn’t Twitter making Enough Progress?
Twitter’s sale of Agrawal would be an acknowledgement that he is not making enough progress toward increasing the company’s profitability. Even though Twitter is on schedule to fulfil aggressive financial targets for 2023. As recently as November, Twitter’s shares were trading higher than Musk’s bid price.
On April 14, Elon Musk said that he plans to acquire Twitter. And take it private with a funding package that includes equity and debt. There are no significant lenders on Wall Street who have yet to commit to providing debt funding for Twitter.
Warren Buffett, another billionaire, uses similar strategies when negotiating purchases, making a single offer and sticking to it. When Tesla CEO Elon Musk originally announced his plan to acquire Twitter. He didn’t reveal any finance specifics, which sparked scepticism among investors.