Elon Musk and Twitter are reportedly close to reaching a deal that would allow Tesla’s CEO to take over the social media company, after talks late Sunday night.
According to the New York Times, the Wall Street Journal and other outlets, the two sides engaged in detailed negotiations over the weekend to discuss specific details of a possible takeover, including a timeline. and possible termination fees if an agreement fails.
Reports suggest a formal deal could be in place this week, possibly as early as Monday. Twitter shares rose 5% in premarket trading on Monday, but below Musk’s offer of $54.20 per share – a sign that investors think there is doubt the deal will be concluded. This would value the company at US$43 billion.
It’s the latest development in a rapidly evolving saga over the past few weeks, one that has seen the world’s richest man quietly buy enough shares in the company to be its biggest owner, before to declare that his interest in the company was “passive” and denying that he had an interest in controlling it.
After being asked to join the board, Musk later rejected that offer and became more aggressive, launching a formal takeover bid. Twitter’s board dismissed this by implementing a “poison pill” designed to thwart any unwanted advances.
The move was largely to buy the company some time to come up with a better alternative to Musk’s offer, but the board’s sudden receptivity is a sign he failed to come up with a deal. a plan B, said Wedbush Securities analyst Dan. said Ives.
“Although the Council approved the poison pill which essentially gave them time to find a ‘white knight’ and a second bidder, it is likely that they are now empty-handed,” he said on Sunday.
WATCH | Here’s why Musk wants to buy Twitter:
Musk said he wanted to buy Twitter because he doesn’t think it lives up to its potential as a platform for free speech.
In recent weeks, he’s voiced a number of proposed changes for the company, ranging from easing its content restrictions — such as the rules that suspended former President Donald Trump’s account — to removing the platform from its issues with fake and automated accounts.
Ives, however, says the beginning of the end game for the company is likely underway, with the most likely scenario being Musk taking over the company.
“The Street will read this news today as the beginning of the end for Twitter as a public company, with Musk likely now on course to acquire the company unless a second bidder steps in,” said said Ives.
Bloomberg Intelligence technology analyst Mandeep Singh agrees that a Musk-led takeover is now the most likely scenario as the company has run out of time to come up with alternatives.
“Twitter’s hand could force it to announce a deal with Elon Musk, given its near-term results likely face headwinds from a sharp slowdown in brand ad spending,” it said. -he declares.