Shares of social media company Twitter were up more than 5 percent in pre-market trading following several reports that the company is close to striking a deal with Elon Musk, the billionaire CEO of Tesla. According to these reports, an announcement is expected to be made about the deal as early as Monday.
Elon Musk announced his intention to buy Twitter for $54.20 per share or a collective amount of $43 billion. This came after he was offered a seat on Twitter’s board and he humbly declined. The billionaire has been acquiring Twitter shares from the end of January through to the beginning of April and currently owns a 9.2 stake in the company which is the largest stake.
Twitter’s board announced a “poison pill” set to expire in April 2022, weeks ago. This, according to the board, was to prevent a hostile takeover of the company. The decision was reached after a unanimous vote by Twitter’s board. Under this structure, if any individual or group acquires beneficial ownership of at least 15 percent of the company’s outstanding common stock without the board’s approval, other shareholders will be allowed to buy additional shares at a discounted rate.
In the past, Elon Musk has criticized Twitter for impeding free speech and even revealed plans to start his own social media company before taking a U-turn and deciding to buy Twitter. The billionaire has plans for Twitter and the biggest of them all is to privatize the company. He also revealed that once he acquires the company, board members will receive zero compensation for serving on the board.
While speaking at the TED2022 conference, he revealed that he had a plan B if his initial plan to acquire Twitter fails. Twitter’s uptight board seems to have loosened up a bit and is welcoming the idea of a Twitter buyout after Elon Musk said he’s secured $46.5 billion in funding. Reports have it that the company’s board met to discuss Elon Musk’s financing plan for his proposed bis on Sunday.
Although it is still quite a mystery what the final deal could look like, reports have it that a deal could be reached on Monday. There is still the possibility that Elon Musk may not end up acquiring the company. Although few, other parties have shown interest in Twitter and Twitter could pay Elon Musk a break-up fee so as to be able to accept another deal.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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