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Twitter Is Reconsidering Musk Takeover Bid, Source Says

Twitter Is Reconsidering Musk Takeover Bid, Source Says

Twitter’s board of directors reportedly met with Elon Musk over the weekend to discuss his $43 billion takeover bid for the social media company. The board is exploring alternative bids, and the company may provide an update by the time it releases its current financial results on Thursday, if not sooner.

Following the Tesla CEO’s bid announcement, Twitter’s management unveiled a so-called “poison pill” approach to ward against a potential hostile takeover.

Mr Musk intends to fund his effort with the help of Morgan Stanley and other financial institutions in the United States. According to sources, details of Mr Musk’s proposed financing were given to US regulators on Thursday, prompting Twitter’s 11-member board to explore a prospective acquisition seriously.

According to an SEC filing, Mr Musk, who owns more than 9% of Twitter, has lined up a $46.5 billion funding package for his offer. The funds will be raised by combining his own assets and the support of Wall Street banking giant Morgan Stanley and other firms.

Following Mr Musk’s announcement of the financing proposal, several Twitter shareholders allegedly contacted the firm, urging it not to waste the opportunity for potential purchase.

According to Dan Ives, an analyst at investment firm Wedbush Securities, many investors will see the discussions as “the beginning of the end for Twitter as a public entity, with Musk likely now on the road to acquire the company unless a second bidder comes into the equation.”

As the world’s wealthiest man, Musk’s hostile takeover attempt would place “additional pressure on the board with their backs against the wall in this Game of Thrones war over Twitter,” Mr Ives noted.

Mr Musk denied a position on Twitter’s board earlier this month, which would have limited the number of shares he could acquire. On 14 April, he made an unsolicited offer to the company.

The next day, Twitter’s board of directors announced a plan to protect the company from a hostile acquisition by instituting a “limited-duration shareholder rights plan,” sometimes known as a “poison pill,” to reject the bid.

Twitter’s board met Sunday to discuss Musk’s financing plan for his proposed bid, a source close to the situation told CNBC. The person said the board is looking for other offers, and the company could provide an update by the time it reports its latest financial results Thursday, if not before.

Twitter management is reconsidering the offer and are more likely to seek a settlement. However, the situation remains uncertain after the two parties met on Sunday to discuss Musk’s $43 billion offer.

The social networking business is still figuring out how much it is worth. According to reports, executives may also want guarantees, such as Musk covering break up expenses if the deal goes through.

However, Musk has declared that he will not change his initial offer.