Twitter shares rise on reports it will accept Musk takeover bid


Representatives of Twitter and Musk worked through Sunday night to hammer out the deal, which could still fall apart, according to the reports.

Representative image | Photo: AFP

New York: Twitter shares rose Monday following reports the company is poised to accept Elon Musk's takeover offer, a dramatic shift after the board organized a "poison pill" to ward off the billionaire entrepreneur's hostile buyout bid.

The deal, which media outlets including The Wall Street Journal and The New York Times reported could be announced later in the day, would put the Tesla boss in charge of the influential social media site perhaps best known for serving as a megaphone for former US president Donald Trump.

Representatives of Twitter and Musk worked through Sunday night to hammer out the deal, which could still fall apart, according to the reports.

There was no immediate comment from Twitter.

Twitter CEO Parag Agrawal and Musk were likewise quiet, although both had used the site to post updates about the deal.

Musk took a major stake in the firm earlier this month before making a formal purchase offer.

"I think at this point, a deal seems, based on the glide path, to get done," Dane Ives, senior equity analyst at Wedbush Securities, said in an interview on CNBC.

Musk last week lined up around $46.5 billion in financing to make the purchase happen, and Ives said, "The board couldn't find a white knight, a second bidder. This basically put (their) back against the wall, they had to come to the negotiation table."

Around 1435 GMT, Twitter shares were up 3.2 percent.

Musk launched his $43 billion hostile takeover bid for the company, casting it as a promotion of freedom of speech.

While the firm's board initially said it was reviewing the offer, it later rebuffed him and adopted a "poison pill" plan that would make it harder for Musk to acquire a controlling stake.

That defense kicks in if an investor buys more than 15 percent in shares without the directors' agreement. Musk holds nine percent.

Last week, Musk -- considered the world's richest man due to the explosive popularity of Tesla electric vehicles as well as other ventures -- said he had lined up financing for the deal and was "exploring" a direct tender offer to shareholders, a maneuver that would circumvent the company's board.

Despite Musk's great wealth, the question of financing had been seen as a potential stumbling block because much of his holdings are in Tesla shares rather than cash.

In a filing, Musk pointed to a $13 billion debt facility from a financing consortium led by Morgan Stanley, a separate $12.5 billion margin loan from the same bank, as well as $21 billion from his personal fortune as being behind the deal.

Musk's efforts have raised hopes about the commercial potential of Twitter, which has struggled to achieve profitable growth despite its influential spot in culture and politics.

But the polarizing Tesla CEO's campaign also has sparked concern among technology and free-speech experts who point to Musk's unpredictable statements and history of bullying critics, which contradict his stated aims.

Under Agrawal, who took over as Twitter CEO late last year, the company has made progress on new monetization features, such as subscription products, said a note from Truist Securities, adding that "short-term, Musk's involvement at this stage runs the risk of disrupting those efforts."

(AFP)

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