‘Twitter starts takeover talks with Elon Musk’ – update

Twitter has begun negotiations with Elon Musk about the takeover of the social medium. Among other things, the platform would like to investigate whether Musk is willing to pay a higher price. Twitter was initially against the deal, but is said to have caved to pressure from shareholders.

The start of the negotiations does not necessarily mean that the Twitter board actually wants to sell the company, anonymous sources emphasize against Reuters. With the talks, the company wants to investigate to what extent Musk can actually take over the company.

For example, Twitter wants to know whether national regulators such as the Securities and Exchange Commission are still actively investigating Musk and whether these investigations pose a risk to a successful takeover. Musk has often had issues with stock watchdog SEC, because, for example, he reflected Tesla’s car production in 2019 more favorably than could actually be achieved. Even when buying Twitter shares, Musk would not have announced in time that he had bought a certain part of the shares. Twitter wonders whether this could play a role in the takeover of the platform.

In addition, the board wants to know with the talks whether better conditions are possible. Musk has already said his bid for $54.20 per share, or $38 billion for the entire company, is his highest and final offer. A possible additional condition is that Twitter will receive a compensation if the deal does not go through for some reason.

Tesla CEO Musk indicated on April 14 that he wanted to take over Twitter, after he previously became the largest shareholder in the company. However, the board of Twitter would have seen that offer as ‘unwelcome’ and therefore threatened with a ‘poison pill strategy’. In addition, existing shareholders can buy more shares in a company at a discount, making it more difficult for Musk to take over the company.

Twitter would now enter into talks with Musk because ‘many’ shareholders of the company are afraid that they will not be able to get a better price for their shares in the short term. Other shareholders would like to give the new CEO of the company more time to prove himself and therefore find the proposed acquisition amount too low.

Update, 1:57 PM: Sources say to Reuters that the sale agreement between Twitter and Musk is “almost finalized” and may be announced on Monday. Twitter’s board of directors would have to meet first to recommend the sale to shareholders. The company would have agreed to Musk’s offer of 38 billion euros.