M. Musk met with the 11-member members of the company’s board to discuss his offer for social networking site to be bought and made it private. A deal could be reached as soon as Monday.
Two people familiar with the situation say that Twitter is close to a deal to sell itself Elon Musk. This would bring together the world’s wealthiest man and the social network service. According to people, an agreement could be announced by Monday.
The board of Twitter was meeting with Musk to discuss his unsolicited bid for the company’s purchase. Musk had already raised $46.5 billion in financing last week. They were discussing details such as a timeline for closing any potential deal and fees that would be payable if the agreement was not signed.
According to people, these discussions took place after a Twitter board meeting was held on Sunday morning to discuss Mr. Musk’s offer. The board’s decision to obtain commitments for financing was pivotal in how it viewed Mr. Musk’s offer of $54.20 per share. This allowed the 11 members of the board to consider his offer seriously, according the people.
Twitter stock opened at $51 per share, 4 percent more than Monday.
Although an agreement is not final, it may still fall apart. However, what appeared at first to be highly unlikely seemed to be close to its end. According to people familiar with the situation, Twitter and Mr. Musk are still in flux and moving quickly.
Musk, who has over 83 million followers on Twitter, began to accumulate shares in the company earlier this season and declared his intention to purchase the company on April 14, and take it private. Wall Street quickly rejected his proposal because it wasn’t clear if he had the funds to make the deal. Twitter also used a “poison pills” to stop Musk from buying more stock.
Last week, Mr. Musk updated his proposal. This put pressure on Twitter to consider Musk’s offer more seriously. On Thursday, Musk made a securities filing, which was public. He described how he had arranged financing from Morgan Stanley and other lenders. These loans included $13 billion in loan financing, as well as $12.5 billion to finance his Tesla stock. He stated that he would use $21 billion more cash to purchase the remaining equity in Twitter.
Twitter declined to comment. The company previously stated that its board had “continued to conduct a careful and comprehensive review to determine the best course of action for the company and all Twitter stockholders.”
A request for comment was not answered by Mr. Musk. The Wall Street Journal reported earlier that Twitter was more open to Mr. Musk’s bid.
Wall Street would likely view Mr. Musk’s openness to his bid by Twitter’s board as “the beginning for Twitter as an public company with Musk now likely on a path to purchase the company,” Dan Ives (an analyst at Wedbush Securities) wrote in a Sunday note.
The offer Mr. Musk made for Twitter represents a 54 percent premium to the share price on the day he started investing in the company in January. Twitter shares traded higher than Mr. Musk’s offer for most of last year.
Analysts have stated that they expect Twitter’s board will accept a bid at least $60 per share. Twitter stock rose to above $70 per share in 2013 when it announced its goal to double its revenue. However, its value has fallen to $48 since then as investors doubt its ability to achieve those goals.
Musk, 50, stated that Twitter is not a good social media platform and that there are many flaws. Musk has stated that he would like to transform Twitter into a platform for free speech all over the world and that the company’s product and policies must be improved.
Musk tried to negotiate via Twitter, and threatened in multiple tweets that he would take his offer directly to shareholders. A tender offer is an aggressive maneuver whereby an outside party asks shareholders to sell their shares to it.
Also, he has acted in a erratic manner on the platform, raising questions about how he will manage it if he is the one responsible. On Saturday, Mr. Musk attacked Bill Gates by claiming that he had taken a “shorter” position on Tesla’s stock, which meant that Mr. Gates was betting that Tesla’s shares will fall. On Sunday, Musk said that he was “moving forward” and not making fun of Bill Gates.
However, Musk still maintains friendly ties with high-ranking Twitter users. Musk exchanged friendly tweets over the weekend with Jack Dorsey (the company’s founder and a member of its board). In November, Twitter’s chief executive officer, Mr. Dorsey, resigned and will soon be leaving the board.
Both men have similar views on cryptocurrency and on promoting free speech online. Mister Musk had briefly considered joining Twitter’s board, but Mr. Dorsey quickly replied, “I’m really glad Elon is joining Twitter board!” He is deeply concerned about the world and Twitter’s place in it.
Block, a financial service company headed by Mr. Dorsey disclosed on Friday that he had changed his title from chief executive to Block Head. This shift seemed to resonate with Mr. Musk.
“Your new title at Block was fire,” Musk tweeted to Mr. Dorsey Saturday using two flame emoticons to show his approval. Last year, Tesla’s chief executive was replaced by Mr. Musk as technoking.