【Text/Observer Network Liu Qian】
According to the Wall Street Journal reported on the 25th, informed sources revealed that Twitter Company has communicated with Musk on the 24th about "acquiring 100% of Twitter's shares". This means a major shift in Twitter's approach to acquisitions. Earlier, when Musk first proposed the acquisition on the 14th, Twitter explicitly refused, and even proposed the so-called "poison pill plan" to boycott the acquisition.
People familiar with the matter also said that the reason why Twitter is willing to talk is that Musk has privately contacted some Twitter shareholders on the 22nd, hoping to influence The decision of Twitter Company through them, and Twitter management is forced by shareholder pressure and finally began to negotiate with Musk. The Wall Street Journal said it was possible that the two sides could reach an acquisition agreement within this week.
On December 1, 2020, local time, Berlin, Germany, Tesla CEO Elon Musk. Pictured from Visual China
Musk has always been an active user of Twitter, and his Twitter account currently has more than 80 million followers. Recently, Musk has been critical of Twitter's "lack of freedom of speech" and has expressed ideas for improving Twitter or creating a new communication platform.
According to filings from the U.S. Securities and Exchange Commission on April 4, Musk has acquired about 9 percent of Twitter's shares, becoming its largest single shareholder. After that, Musk proposed a privatization plan to Twitter on the 13th, planning to buy 100% of Twitter's shares at a cash bid of $54.2 per share and a total price of about $41 billion.
Twitter's board then launched a defense package called "Poison Pill Project" to block Musk's acquisition plans, people familiar with the matter said. The specifics of the plan: If Musk buys more than 15% of Twitter stock, other shareholders will be able to buy additional new shares at a discounted price. That would make Musk's acquisition more expensive.
However, Twitter's attitude towards the acquisition has changed now.
According to people familiar with the matter to the Wall Street Journal, Twitter is currently in an in-depth exchange with Musk on the acquisition transaction, and they may reach an agreement on the 25th (Monday) local time, and it is also possible to reach it within this week. To that end, the Wall Street Journal wrote directly in the headline that "Twitter, Musk or deal on Monday."
Screenshot from the Wall Street Journal
Musk is not expected to raise the purchase price in the exchange. In fact, Musk has said from the outset that the $54.2 per share offer is his "best and final offer," and he reiterated to Twitter's board chairman in recent days that he would not budge on price.
People familiar with the matter said the conversation between the two sides is expected to focus on some other issues, such as how much compensation Musk will pay if the agreed deal breaks down before it is completed.
So why is there an attitude shift on Twitter? The Wall Street Journal said that the reason was that Musk held a video conference with several Twitter shareholders on the 22nd, he introduced some of the benefits of his own acquisition plan, and hoped that these shareholders could persuade the company to consider the acquisition. Subsequently, he won the support of some shareholders.
Reuters was more blunt in its report, saying that after Musk detailed his acquisition plans for Twitter's shareholders, many of them began contacting the company to urge it not to let the opportunity slip away.
According to the report, Twitter management is forced to negotiate with Musk under shareholder pressure. While Twitter can execute the "poison pill plan," if the plan goes against the will of many shareholders, then Twitter's negotiating power will be greatly weakened.
Notably, Twitter's stock price has soared 25% since Musk launched his takeover offer in early April. In the morning trading on the 25th local time, Twitter shares rose more than 3% to $50.83 per share. Still, that's below Musk's $54.2 purchase price.
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