Twitter Might Accept Musk’s Takeover Offer, DOGE Jumps
Twitter is set to accept Tesla chief and billionaire Elon Musk’s offer to buy 100% of the shares in the company for USD 54.20 per share, multiple media outlets have reported on Monday. (Updated at 13:13 UTC: updates throughout the entire text.)
According to a Reuters report citing unnamed sources “familiar with the matter,” Twitter will accept to sell the company to Musk for a total of USD 43bn in cash. As of 13:00 UTC, shares of Twitter have risen 4.7% in pre-market trading to a price of USD 51.24.
The deal is expected to go through as soon as later today, with Twitter now working on the specific terms of the transaction, Bloomberg reported. It added that Musk is continuing to speak to potential co-investors on the deal.
The news on Monday come after reports from Sunday that Musk and Twitter’s board were in talks about a potential deal. The Wall Street Journal cited unnamed sources saying progress was made, although some issues still remained to be worked out. The sources stressed that there is no guarantee the two sides will reach a deal.
Notably, the sources also said Musk so far has refused to budge on the price of his offer – USD 54.20 per share – which he has previously called his “best and final offer.” Instead, talks were expected to focus on how much Musk would pay should an agreed deal “fall apart before being consummated,” the article said.
Shares of Twitter rose by 3.93% on Friday to USD 48.93, even as the broader stock market fell lower. The rise indicates that the market now sees it as more likely that a deal for Musk to buy the shares could go through.
Meanwhile, dogecoin (DOGE), which is often being promoted by Musk, is the second-best performer among the top 100 cryptoassets by market capitalization today. At 13:10 UTC, DOGE trades at USD 0.14 and is up almost 6% in a day, trimming its weekly losses to 1%.
It was widely thought that Musk’s original offer to buy Twitter would not go through, after reports emerged that Twitter’s board did not welcome a takeover of the company, with the board even deploying a so-called poison pill defense strategy to prevent it.
However, Twitter’s board appeared to change its tune and open the door to negotiations after Musk showed that he had secured USD 46.5bn to finance the deal, and the stock market crashed before the weekend.
If the board does not welcome Musk’s efforts, it is speculated that he could take his bid directly to shareholders through a so-called tender offer. The speculations followed a cryptic tweet from Musk saying “_______ is the Night.” The words seem to refer to a title of a novel by F. Scott Fitzgerald, with the word “Tender” missing.
Meanwhile, on Friday last week, talks were also held between Musk and select shareholders – particularly actively managed funds – in a series of video calls, the article said. Among those participating in discussions, Lauri Brunner, the manager of a large-cap growth fund operated by Thrivent Asset Management LLC, praised Musk, according to the report.
“He has an established track record at Tesla,” Brunner said, adding that she believes Musk is “the catalyst to deliver strong operating performance at Twitter.”
Musk’s plans for Twitter involve a greater emphasis on free speech. In addition, the outspoken billionaire has also suggested that he would limit the platform’s reliance on advertising, and even teased the idea of incorporating dogecoin (DOGE) payments.
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