Twitter is set to accept Elon Musk’s buyout offer, according to a source. After its board meets to suggest the merger to Twitter shareholders, Twitter may declare it has accepted Musk’s offer at a later time on Monday, according to Reuters. The agreement might yet go apart, according to the sources.
Twitter’s stock soared by more than 5% in premarket trade on Monday after the publication of a story by Reuters.
In order to pursue more offers from possible purchasers after the contract was inked, Twitter was unable to gain a so-called “go-shop” option from Musk. A break-up fee might still be paid by Twitter in order to accept an offer from another party, according to the sources.
According to Reuters, Musk met with numerous shareholders over the weekend to discuss the terms of his $54.20 per share offer for the social media network. Musk’s outreach compelled Tesla’s board of directors to take the CEO’s $43 billion takeover attempt seriously.
According to Reuters, several Twitter stockholders contacted the firm over the weekend after Musk presented a comprehensive financial plan for his offer on Thursday.
The board of Twitter is worried that if they oppose its investors in the event that Musk offers an appealing tender offer, their negotiation position would be weakened. The sources said that Musk’s insistence that his offer for Twitter is his “best and last” has surfaced as a stumbling block in the transaction discussions.
As reported by Reuters, Twitter’s board of directors is allegedly in negotiations with Musk to learn more about his proposal and to determine if there is any wiggle space to negotiate better terms for the firm.
The sources told Reuters that Twitter hasn’t yet determined if it would look into selling to put pressure on Musk to boost his proposal.
In order to restore Twitter’s original aim of providing a forum for “free expression,” Musk has made a compelling offer to acquire the company and take it private. A “poison pill” defense was put in place by Twitter’s board in an attempt to prevent a hostile takeover bid from being launched by CEO Elon Musk on the social media site.
Because of Musk’s threat to make a tender offer, the board of directors has decided to take his offer seriously and utilize it as a way to gain shareholder support for it.
Tesla CEO Elon Musk and Twitter CEO Jack Dorsey met earlier this weekend, as reported by The Wall Street Journal. There are rumors that Musk is being investigated by the Securities and Exchange Commission as well as the company’s board of directors.
The tweet saying Musk had obtained funding to take Tesla, private, at $420 per share has cost investors billions of dollars, according to investors. There is now a class-action lawsuit against Musk and an ongoing legal struggle with the SEC after the tweet was sent out.
January 2023 is projected to be the beginning of the trial. The Securities and Exchange Commission (SEC) is also examining whether Tesla CEO Elon Musk broke any regulations by not reporting that he had bought Twitter stock earlier this month.
Reuters reports that Twitter is also investigating if authorities in any of the main markets in which it operates would object to Musk controlling the firm. According to Reuters, Twitter might demand a significant break-up fee if it determines that a sale to Musk is hazardous.