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Microblogging site Twitter is reconsidering Elon Musk’s buyout proposal, The Wall Street Journal reported. Twitter is under increasing pressure from its shareholders to negotiate with Musk as he has called his $43 billion bid the best and final offer, familiar sources said on Sunday.
Musk has been meeting with Twitter shareholders since he unveiled his offer, seeking support for his bid. Musk has said Twitter needs to be taken private to grow and become a genuine platform for free speech. Representatives for Twitter and Musk did not immediately respond to requests for comment.
Many shareholders reached out to the company after Musk disclosed his acquisition financing plan on Thursday and urged it not to let the opportunity for a deal slip away, a Reuters report said.
Board, shareholders’ reaction
Twitter's board is expected to find that Musk's all-cash $54.20 per share offer for the company is too low by the time it reports quarterly earnings on Thursday. Nonetheless, some shareholders who agree with that stance still want Twitter to a better offer from Musk, whose net worth is pegged by Forbes at $270 billion, the sources told Reuters.
"I don't believe that the proposed offer by Elon Musk ($54.20 per share) comes close to the intrinsic value of Twitter given its growth prospects," Saudi Arabia's Prince Alwaleed bin Talal, a Twitter shareholder, tweeted on April 14.
One option available to Twitter's board is to persuade Musk to sweeten his bid. Another would is to solicit offers from other potential bidders. According to sources, the board will likely attempt to solicit a better offer from Musk even as it rebuffs the current one, Reuters reported.
"I wouldn't be surprised to wake up next week and see Musk raise what he called his best and final offer to possibly $64.20 per share. He could also drop the whole thing entirely. Anything is possible," Reuters quoted a fund manager.
Twitter adopted a poison pill to prevent Musk from acquiring more than a 15 per cent stake in the company. He currently owns 9.2 per cent of the shares. In response, Musk has threatened to launch a tender offer that he could use to register Twitter shareholder support for his bid.
While the poison pill would prevent Twitter shareholders from tendering their shares, the company is worried that its negotiating hand would weaken considerably, Reuters reported.
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