August 19, 2022

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Twitter’s board of directors is reportedly on the verge of accepting Elon Musk’s offer to buy the company, according to news reports.

“Twitter is poised to agree [to] a sale to Elon Musk for around $43 billion in cash” and “may announce the $54.20-per-share deal later on Monday once its board has met to recommend the transaction to Twitter shareholders,” Reuters wrote in a story with the headline, “Twitter set to accept Musk’s original $43 billion offer.” Reuters cited “people familiar with the matter.”

The Wall Street Journal reported that “Twitter is in advanced discussions to sell itself to Elon Musk and could finalize a deal Monday,” after “the two sides worked through the night to hash out a deal.” Bloomberg similarly wrote that Twitter and Musk are “in the final stretch of negotiations… and could reach an agreement as soon as Monday if negotiations go smoothly.” Bloomberg also wrote that “the situation is fluid, and talks could drag on longer or fall apart.”

The turn of events comes just 10 days after Twitter’s board approved a poison pill to prevent a hostile takeover in response to Musk’s initial offer.

According to Reuters, Twitter has not been able to secure “a ‘go-shop’ provision under its agreement with Musk that would allow it to solicit other bids once the deal is signed, the sources said. Still, Twitter would be allowed to accept an offer from another party by paying Musk a break-up fee, the sources added.”

Musk obtained financing and met with shareholders

Musk’s first offer was contingent on “completion of anticipated financing.” On Friday, he revealed that he has $46.5 billion of financing lined up.

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“The financing was a turning point for how Twitter’s board viewed Mr. Musk’s bid of $54.20 a share, enabling the company’s 11 board members to seriously consider his offer,” The New York Times wrote today, citing “two people with knowledge of the situation.”

On Friday, “Musk met privately Friday with several shareholders of the company to extol the virtues of his proposal while repeating that the board has a ‘yes-or-no’ decision to make,” The Wall Street Journal wrote, adding that “Musk made his pitch to select shareholders in a series of video calls, with a focus on actively managed funds… in hopes that they could sway the company’s decision.”

Musk previously purchased 9.2 percent of Twitter’s stock, he revealed in a Securities and Exchange Commission filing in early April. Musk subsequently agreed to join Twitter’s board in a deal that would have prohibited him from buying more than 14.9 percent of the company’s stock, but he backed out of the deal and offered to buy Twitter instead.

Musk has been questioning Twitter’s commitment to free speech principles. In his initial offer, Musk wrote, “I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy. However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.”