Elon Musk’s Twitter account is seen on a smartphone in this photo illustration taken on April 15, 2022. Reuters/Dado Ruvik/Illustration
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Apr 24 (Reuters) – Twitter Inc (TWTR.N) is coming under pressure from its shareholders to negotiate with Elon Musk, even as the world’s richest man has adopted his $43 billion bid for the social media platform. Best and final offer told, people are aware of the matter on Sunday.
Sources said Twitter shareholders have differing views on what would be a fair value for a deal, with Musk contacting the company on Thursday after outlining its acquisition financing plan and not eliminating the deal opportunity. urged to be. , speaking on condition of anonymity. read more
Twitter’s board is expected to find out that Musk’s all-cash $54.20 per share offering is too little for the company by the time it reports quarterly earnings on Thursday. Nonetheless, some shareholders who agree with that stance still want Twitter to seek a better offer from Musk, whose net worth is estimated by Forbes at $270 billion, sources told Reuters.
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One option available to Twitter’s board is for Musk to open his books to try to persuade him to sweeten his bid. The second would be to solicit offers from other potential bidders. While it is not yet clear which route Twitter will take, it is increasingly likely that its board will attempt to seek a better offer from Musk, even if he rejects the current one, sources said.
“I wouldn’t be surprised to wake up next week and see Musk possibly offer $64.20 a share,” one of the fund managers investing in Twitter said on condition of anonymity to discuss the private conversation. Company.
Regarding Musk’s offer, the fund manager said, “He could have skipped the whole thing altogether. Anything is possible.”
Twitter shares closed Friday at $48.93, a significant discount to Musk’s offering that reflects uncertainty over the fate of his bid.
Twitter took a poison pill after its offer to stop Musk from raising his more than 9% stake in the company to above 15% without negotiating a deal with its board. In response, Musk has threatened to launch a tender offer that he can use to register Twitter shareholder support for his bid.
Twitter’s board is concerned that unless it wants to negotiate a deal with Musk, many shareholders may support him in a tender offer, the sources said. Sources said the poison pill would prevent Twitter’s shareholders from tendering their shares, but the company is concerned that its negotiating arm will be significantly weakened if it shows up to go against the wishes of many of its investors.
Musk, the chief executive of electric car maker Tesla Inc. (TSLA.O), is meeting with Twitter shareholders as he unveiled his proposal on April 14, seeking support for his bid. Musk has said that Twitter needs to be taken personally for it to grow and become a real platform for freedom of speech. read more
Representatives for Twitter and Musk did not immediately respond to requests for comment.
The Wall Street Journal reported on some of Musk’s meetings with Twitter shareholders earlier on Sunday. The paper also reported that Musk and Twitter would hold a meeting on Sunday to discuss the acquisition proposal.
Sources said the price expectation among Twitter shareholders for the deal is largely based on their investment strategy. Sources said active long-term shareholders, who together with index funds hold the largest majority of Twitter shares, have higher price expectations, some at $60-per-share. Sources said they are keen to give more time to Parag Agarwal, who became Twitter’s chief executive in November, to boost the value of the company’s stock.
Saudi Arabia’s Prince Alwaleed bin Talal, a Twitter shareholder, tweeted on April 14, “I don’t think the offer by Elon Musk ($54.20 per share) comes close to the intrinsic value of Twitter.”
Sources said short-term-minded investors like hedge funds want Twitter to accept Musk’s offer or ask for only a small increase. Sources said some of them are upset that the recent fall in the value of technology stocks amid concerns of inflation and economic slowdown makes it unlikely that Twitter will be able to provide more value for itself anytime soon.
I would say, take $54.20 per share and be done with it, said Sahm Adrangi, portfolio manager at Kerrisdale Capital Management, a hedge fund that owns 1.13 million shares in Twitter, or 0.15% of the company, and has been a 2020. Investor from the beginning.
Sources said a silver lining for Twitter’s board is that Musk’s offer did not appear to turn his army of Twitter followers into new shareholders in the San Francisco-based company who could support his bid. According to sources, Twitter’s retail investor base has grown by about 20% before Musk disclosed his stake on April 4.
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Reporting by Sway Herbst-Bellis in Boston and Greg Rumeliotis in New York; Editing by Will Dunham
Our Standards: Thomson Reuters Trust Principles.
