Elon Musk in Talks with Investors to Help Take Over Twitter
Billionaire continues push to take over corrupt social media platform
Tech billionaire Elon Musk is reportedly in talks with investors about joining his bid to take over Twitter.
Sources familiar with the matter told the New York Post that a partnership could be announced in a matter of days.
Musk initiated a bid to take over the social media giant earlier this week after revealing he'd already bought 9.2% of the company.
The Tesla CEO made an offer of $54.20 per share for all of Twitter’s shares, a bid worth more than $40 billion.
While Musk’s potential partners are unknown, sources told the post that one could be Silver Lake Partners.
Musk has worked with the company in the past and it is co-run by one of the members of Twitter’s board of directors.
As the New York Post reported:
One possibility, the sources said: teaming with private-equity firm Silver Lake Partners, which was planning to co-invest with him in 2018 when he was considering taking Tesla private.
Silver Lake’s Co-CEO Egon Durban is a Twitter board member and led Musk’s deal team during the 2018 failed effort to take Tesla private, sources said.
Silver Lake declined to comment.
The report of Musk’s strategizing comes after the Twitter board inserted a “poison pill” in its bylaws to stave off Musk’s hostile takeover.
The Twitter board passed a shareholder rights plan on Friday that would allow board members to purchase additional stock at a discount if a single entity purchases a total of at least 15% of Twitter’s stock.
A poison pill allows other shareholders – but not the would-be buyer – to scoop up newly minted shares at a discount, boosting their investments while forcing the target to swallow “economic poison” by having his shares diluted.
The move is an unmistakable signal that the board is not interested in the prospective hostile acquirer, despite a potential profit for shareholders.
If the maneuver succeeds, shareholders are certain to flood the courts with lawsuits, accusing the directors of Twitter of breaching their fiduciary duties.
There are three possible outcomes now, none of which are ideal for Twitter’s current board:
One: Musk could win by successfully initiating a proxy contest to remove the directors and nix the poison pill.
Two: Musk forces the company to find a “white knight,” or alternative buyer, potentially at a higher price, thus making his shares more valuable.
Three: Musk walks away and leaves the company and the board facing a pile of lawsuits as shareholders blame them for hurting the value of their stock.