Twitter nears deal to sell itself to Elon Musk

Update, 3:05 p.m. EST, April 25: Elon Musk has reached an agreement to buy Twitter for about $44 billion. Follow the latest updates →

Twitter is set to strike a deal to sell itself to Elon Musk, two people with knowledge of the situation have said, a move that would unite the world’s richest man with the influential social networking service. A deal could be announced as early as Monday, the sources said.

Twitter’s board was negotiating with Mr. Musk into the early hours of Monday over his unsolicited offer to buy the company, after he began lining up $46.5 billion in funding for the company. offer last week, said the people, who spoke on condition of anonymity because they were not authorized to discuss confidential information. The two sides were discussing details, including a timeline for completing any potential deal and any fees that would be paid if a deal was signed and then fell apart, they said.

The talks followed a Twitter board meeting on Sunday morning to discuss Mr Musk’s offer, the people said. Securing funding commitments was a turning point in how the board considered Mr. Musk’s offer of $54.20 per share, allowing the 11-member board of directors to company to seriously consider its offer, the people said.

Shares of Twitter opened Monday up 4% to around $51 per share.

A deal is not yet final and may yet fall apart, but what initially seemed like a highly unlikely deal appeared to be coming to an end. The situation involving Twitter and Mr. Musk remains fluid and rapidly evolving, people with knowledge of the situation said.

Mr Musk, who has more than 83 million Twitter followers and began hoarding shares in the company earlier this year, has said he intends to buy the company on April 14 and take it private. But his proposal was quickly rejected by Wall Street as it was unclear if he could find the money to close the deal. Twitter also adopted a “poison pill”, a defensive maneuver that would prevent Mr. Musk from accumulating more shares of the company.

Mr Musk updated his proposal last week, pressuring Twitter to consider his offer more seriously. In a securities filing made public on Thursday, Mr Musk detailed how he arranged financing from investment bank Morgan Stanley and a group of other lenders, which offered $13 billion in debt financing, plus another $12.5 billion in loans against his shares in Tesla, the electric car manufacturer he heads. He said he would use another $21 billion in cash to buy the rest of Twitter’s equity.

A Twitter spokesperson declined to comment. In previous public statements, the company said its board “continues to conduct a careful, comprehensive, and deliberate review to determine the course of action in the best interests of the company and all Twitter shareholders.”

Mr. Musk did not respond to a request for comment. The Wall Street Journal reported earlier Twitter’s increased receptivity to Mr. Musk’s offer.

Wall Street was likely to view Twitter’s board’s openness to Mr. Musk’s bid as “the beginning of the end for Twitter as a public company with Musk likely now on the path to acquiring the company.” ‘unless a second bidder enters the mix’. Dan Ives, an analyst at Wedbush Securities, wrote in a note Sunday.

Mr Musk’s bid for Twitter is a 54% premium to the stock price the day before he started investing in the company in late January. But Twitter shares have traded higher than Mr Musk’s bid for much of the last year.

Several analysts have said they expect Twitter’s board to only accept an offer valuing it at a minimum of $60 per share. Twitter’s stock topped $70 per share last year when the company announced its goal of doubling its turnoverbut has since fallen to around $48 as investors questioned its ability to achieve those targets.

Mr Musk, 50, has made it clear he sees many shortcomings in Twitter as a social media service. He said he wanted to “transform” the company into a “platform for free speech around the world” and needed broad improvements in its products and policies.

Mr. Musk has tried to negotiate with Twitter using the service himself, threatening in several tweets that he might take his offer directly to the company’s shareholders in what’s called a “tender offer.” “. A takeover bid is a hostile maneuver in which a third party circumvents a company’s board of directors by asking shareholders to sell their shares directly to it.

He also acted erratically on the platform, raising concerns about how he might run the service if he was in charge. Saturday, Mr. Musk targeted billionaire Bill Gates, saying Mr. Gates had taken a “short” position in Tesla’s stock, which meant that Mr. Gates was betting the automaker’s shares would fall. On Sunday, Mr. Musk tweeted that he was “go forwardto mock Mr. Gates.

Even so, Mr. Musk maintains friendly ties with some high-ranking members of Twitter. Over the weekend, Mr. Musk exchanged friendly tweets with Jack Dorsey, the company’s co-founder and board member. Mr Dorsey stepped down as chief executive of Twitter in November and will soon leave its board.

Both men share similar views on cryptocurrencies and promoting greater freedom of expression online. When Mr. Musk briefly flirted with the idea of ​​joining Twitter’s board this month, Mr. Dorsey tweeted“I’m really happy that Elon is joining the Twitter forum! He cares deeply about our world and Twitter’s role in it.

On Friday, Block, a financial services company run by Mr Dorsey, revealed he had changed his title within the business from chief executive to ‘Block Head’. This change seemed to resonate with Mr. Musk.

“Your new title at Block is fire,” Mr. Musk tweeted to Mr. Dorsey on Saturday, using two flame emojis to signify his approval. Last year, Mr. Musk changed his title at Tesla from chief executive to technology.