Monday, August 15, 2022
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Twitter Board Reconsiders Musk’s Bid to Buy Company

Elon Musk allegedly met with Twitter’s board of directors over the weekend to discuss his $43 billion (£33.6 billion) buyout bid.

Following the announcement of the Tesla CEO’s proposal, Twitter’s management declared a “poison pill” strategy to stave against a hostile takeover.

Mr Musk intends to fund his effort with the help of Morgan Stanley and other financial institutions in the United States.

Twitter’s representative declined to comment on the claims.

According to Reuters, the New York Times, and Bloomberg, which cited anonymous sources, details of Mr Musk’s plan to finance his bid, which were presented to US authorities on Thursday, prompted Twitter’s 11-member board to seriously explore a prospective transaction.

Many investors would see the conversations “as the beginning of the end for Twitter as a public business, with Musk likely now on a road to purchase the company unless a second bidder enters into the mix,” according to Dan Ives, an analyst at investment firm Wedbush Securities.

Mr Ives added that a hostile takeover bid by Mr Musk, the world’s wealthiest man, would place “additional pressure on the board with their backs against the wall in this Game of Thrones war over Twitter.”

Many investors would see the conversations “as the beginning of the end for Twitter as a public business, with Musk likely now on a road to purchase the company unless a second bidder enters into the mix,” according to Dan Ives, an analyst at investment firm Wedbush Securities.

Mr Ives added that a hostile takeover bid by Mr Musk, the world’s wealthiest man, would place “additional pressure on the board with their backs against the wall in this Game of Thrones war over Twitter.”

Mr Musk turned down a position on Twitter’s board of directors earlier this month, limiting the number of shares he could buy. On April 14, he made an unsolicited bid for the firm.

The next day, Twitter’s board of directors revealed a proposal to safeguard the company from a hostile acquisition by implementing a “limited-duration shareholder rights plan,” sometimes known as a “poison pill.”

This action prevents anybody from owning more than a 15% share in the firm. It accomplishes this by letting people to purchase additional shares in the company at a reduced price.

When a person or corporation seeks to take over another company against the wishes of the target company’s management, it is referred to as a hostile takeover offer.

Bob Carlson
Bob Carlson
Bob Carlson is a business journalist, with over a decade of experience in the trenches of reporting up-to-date business news for publications all over the world. With a wealth of knowledge at his back, Bob strives to bring the most important insights into the business world for TheOptic daily.
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