According to Reuters, Twitter’s board of directors may announce today that it has accepted Elon Musk’s offer to buy the company for $54.20 per share.
In its coverage, the news agency cites “people familiar with the matter,” who say the deal could fall through at the last minute.
According to the New York Times, Musk met with Twitter’s board of directors on Sunday, and discussions continued into the early hours of this morning.
On April 4, Musk purchased a 9.1 percent stake in Twitter, making him the company’s largest shareholder.
Twitter announced Musk would be joining its board of directors; however, Tesla’s CEO announced via Twitter on April 9 that he had declined the offer.
Musk’s stake in Twitter would have been limited to no more than 14.9 percent for the duration of his service, plus 90 days if he had accepted the board seat.
Can Musk Afford To Purchase Twitter?
In a nutshell, yes.
However, it will necessitate some ingenious financing.
And, while most buyouts are financed primarily by securing debt against the target company’s assets, Musk is said to have other plans.
Musk is said to be planning to fund two-thirds of the $46.5 billion financing package with his own assets.
Reuters reports, citing sources familiar with the situation, that the banks involved did not see enough cash flow at Twitter to justify securing more debt against it.
Musk’s share of the financing includes a $12.5 billion margin loan secured by Tesla stock.
According to a regulatory filing, if Tesla’s stock drops 40%, the loan repayment is due.
Musk has described Twitter’s acquisition as “extremely important to the future of civilization,” and these figures appear to indicate that potential profit is not his primary motivator.
It’s debatable whether a Musk-led Twitter holds the keys to civilization.
It would almost certainly alter the digital marketing platform.
A less moderated, more open Twitter may pose greater risks to brands attempting to use the channel for two-way customer communications and advertising.
Musk’s experience in online payments, on the other hand, could be a valuable asset for Twitter, particularly for its social commerce strategy.
In a press release issued this afternoon, Twitter confirmed that it had agreed to the acquisition.
Elon Musk will own 100% of the company that buys Twitter for $54.20 per share in cash.
According to the release, the purchase price represents a 38 percent premium over the share price on April 1, 2022, the last day prior to Musk’s purchase of 9.1 percent of Twitter’s stock.
Twitter’s board of directors unanimously approved the transaction, which is expected to close in 2022.
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