Perhaps Twitter might be willing to consider Tesla CEO Elon Musk’s offer to buy the company after all. The social media platform is reportedly taking another look at the billionaire’s offer to take over the company.
The Wall Street Journal reported:
Twitter Inc. is re-examining Elon Musk’s $43 billion takeover offer after the billionaire lined up financing for the bid, in a sign the social-media company could be more receptive to a deal.
Twitter had been expected to rebuff the offer, which Mr. Musk made earlier this month without saying how he would pay for it. But after he disclosed last week that he now has $46.5 billion in financing, Twitter is taking a fresh look at the offer and is more likely than before to seek to negotiate, people familiar with the matter said. The situation is fast-moving and it is still far from guaranteed Twitter will do so.
Musk and Twitter are meeting on Sunday to discuss the proposal, according to the report.
It appears Musk has been working feverishly behind the scenes to garner support for his takeover of the company. WSJ noted that he “met privately” with several shareholders on Friday to “extol the virtues of his proposal.” The Tesla CEO also “pledged to solve the free-speech issues he sees as plaguing the platform and the country more broadly, whether his bid succeeds or not,” the author wrote.
Musk believes Twitter’s management will be able to get the company’s stock to be valued at $54 per share, which is what the Tesla CEO is offering to buy the platform. Twitter is expected to discuss Musk’s bid when it reports first-quarter earnings, which could happen by Thursday.
Originally, it seemed the company would reject Musk’s offer, and even took steps to make it more difficult to take over. Its leadership took a “poison pill” and devalued its own stock to allow other shareholders to buy more shares to prevent him from obtaining a controlling interest in the organization.
However, now that Musk revealed he has $46.5 billion in financing, the company is changing its tune. “Twitter is taking a fresh look at the offer and is more likely than before to seek to negotiate, people familiar with the matter said,” according to the WSJ. “The situation is fast-moving and it is still far from guaranteed Twitter will do so.”
The report also noted:
Mr. Musk already has some shareholders rallying behind him following the meetings. Lauri Brunner, who manages Thrivent Asset Management LLC’s large-cap growth fund, sees Mr. Musk as a skilled operator. “He has an established track record at Tesla,” she said. “He is the catalyst to deliver strong operating performance at Twitter.” Minneapolis-based Thrivent has a roughly 0.4% stake in Twitter worth $160 million and is also a Tesla shareholder.
Musk is mulling taking his bid to the shareholders directly by launching a tender offer, WSJ explained. But he would still need to find a way around the poison pill.
This is a rather interesting development in this story. While many are excited at the prospect of Musk buying Twitter and addressing their politically-biased censorship practices, it seemed like a long shot. This revelation by no means guarantees that the deal will go through, but it appears to be slightly less long of a shot than it did yesterday.