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Saturday, April 1, 2023

Twitter to accept Musk’s $43 billion offer

TechTwitter to accept Musk's $43 billion offer

New York (Times Of Ocean) – Twitter Inc (TWTR.N) is expected to agree a sale to Elon Musk for around $43 billion in cash, the price Musk has called his “best and final” offer for the company, people familiar with the matter said.

Twitter may announce its $54.20-per-share deal later on Monday, once the board recommends the transaction to shareholders, the sources said, adding that the deal could still collapse at the last minute.

Musk, the world’s richest person according to Forbes, is negotiating to buy Twitter in a private capacity, but Tesla (TSLA.O) is not involved.

The sources said that Twitter has not been able to secure a ‘go-shop’ provision in its agreement with Musk that would allow it to solicit other bids once the deal is signed. The sources added that Twitter would still be allowed to accept an offer from another party by paying Musk a break-up fee.

They requested anonymity because the matter is confidential. Neither Twitter nor Musk responded to requests for comment.

In pre-market trading in New York, Twitter shares were up 4.5% at $51.15.

Musk, a prolific Twitter user, has said it needs to be taken private in order to grow and become a platform for free speech.

50-year-old entrepreneur Elon Musk, the CEO of rocket developer SpaceX, has said he wants to combat trolls on Twitter and has proposed changes to the Twitter Blue premium subscription service, including lowering its price and banning advertising.

He has also suggested adding dogecoin as a payment option on Twitter, a vocal proponent of cryptocurrencies.

Twitter’s current leadership team is unable to get the shares to his offer price on its own, but he stopped short of saying that it needs to be replaced.

“In its current form, the company can neither survive nor serve this societal imperative,” Musk stated in his offer letter last week.

Up until Musk revealed a stake in Twitter in April, the company’s shares had fallen about 10% since Parag Agrawal took over as CEO from Jack Dorsey in late November.

Should the deal go through, it would come just four days after Musk unveiled a financing package to support the purchase.

Twitter’s board took his offer more seriously and many shareholders asked the company not to let the opportunity slip away, Reuters reported on Sunday. Twitter’s board was expected to reject Musk’s bid before Musk revealed the financing package, sources said before Musk revealed it.

This move would be an admission by Twitter that Agrawal is not making enough progress in making the company more profitable, despite meeting ambitious financial goals set for 2023. As recently as November, Twitter’s shares were trading higher than Musk’s offer price.

Musk announced on April 14 that he intended to purchase Twitter and take it private using a combination of equity and debt financing. Except for those who advise Twitter, Wall Street’s biggest lenders have all committed to providing debt financing.

The way Musk negotiates – making one offer and sticking with it – resembles the way another billionaire, Warren Buffett, negotiates acquisitions. When Musk first announced his bid for Twitter, he failed to provide any details about its financing, making the market skeptical of its future.

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