Twitter began talks with billionaire Elon Musk on Sunday in response to his $43 billion purchase offer winning support from the company’s shareholders.
Twitter Inc (TWTR.N) began talks with Elon Musk on Sunday after he wooed several of the social media company’s shareholders with financial details on his $43 billion purchase offer, according Reuters.
Though the discussions do not guarantee that Twitter will accept Musk’s $54.20 per share offer, they do indicate that the social media business is open to selling to Musk if an appealing price is offered.
According to one of the sources, Twitter wants to learn more about any ongoing investigations into Musk by regulators, including the Securities and Exchange Commission (SEC), that could threaten the deal’s completion.
According to the insider, Twitter is also looking into whether regulators in any of its major markets would object to Musk owning the company. According to the sources, if Twitter determines that selling to Musk is risky, it may demand a large break-up fee.
Following Musk’s offer, the social media business installed a poison pill to prevent him from boosting his more than 9% ownership in the company above 15% without first negotiating an agreement with the board. Musk has responded by proposing to launch a tender offer in order to gain Twitter shareholder backing for his bid.
The final price would be determined primarily by the shareholders, many of whom are long-term shareholders seeking a higher price, while the rest are short-term investors pleased with Musk’s present offer.
If no progress is made in the negotiations, a tender offer may be made. Such a move would enlist the support of all shareholders who want to take Musk’s deal, putting Twitter in an unpleasant situation with its shareholders by forcing it to choose between their interests and those of the Twitter board.