Twitter board in 'advanced talks' with Musk over takeover deal
Twitter's board of directors is reconsidering Tesla CEO Elon Musk's $43 billion bid to purchase the firm and take it private.
As reported by The New York Times, the board was talking with Mr. Musk into the early hours of Monday about his unsolicited attempt to purchase the firm, after he unveiled a $46.5 billion package to fund his bid last week.
Two people with knowledge of the matter told the NYT that the two parties were discussing various issues, including a deadline to close any potential deal and any fees that would be paid if an agreement was signed and then fell apart.
Earlier, the Wall Street Journal reported that Twitter's shareholders met on Sunday to discuss Musk's buyout bid.
Following the announcement of Musk's bid to buy Twitter for $54.20 per share, or $43 billion, earlier this month, the company's management announced a so-called 'poison pill' approach to ward off a potential hostile takeover.
The move deters anyone from owning more than a 15 per cent stake in the firm, by allowing other investors to purchase additional shares at a discount.
Mr Musk, who owns more than nine per cent of Twitter, told the US Securities and Exchange Commission (SEC) last week that he had secured commitments for $46.5 billion in funding to finance the bid.
Musk intends to use up to $33.5 billion of his own money, which will include $21 billion of equity and $12.5 billion of margin loans. Aside from that, banks - including Morgan Stanley, Barclays and Societie Generale - will contribute $13 billion.
Musk contacted select shareholders over video calls to discuss how he planned to manage the funds. In addition, he reportedly told Twitter chair Bret Taylor that he would not change his $54.20-per-share bid for the firm.
Following Mr Musk's announcement of the financing plan, a number of Twitter shareholders contacted the firm, urging it not to miss the chance for a prospective deal.
Obtaining funding commitments was undoubtedly a turning point in how Twitter's 11 board members viewed Mr. Musk's proposal, allowing them to seriously consider his offer.
Wall Street will likely view the openness of Twitter's board to Mr. Musk's offer as "the beginning of the end for Twitter as a public company, with Musk likely now on a path to acquire the company unless a second bidder comes into the mix," wrote Dan Ives, an analyst at Wedbush Securities, this weekend.
Twitter said last week that its board was committed to completing a thoughtful and comprehensive review of deal and would decide on the course of action that it believes is in the best interest for the firm and its shareholders.