Twitter is edging closer to selling the social media company to Elon Musk for $43.4bn in what could be one of the largest buyouts in history, people briefed about the matter have said.
Twitter’s board was still meeting early on Monday to finalise the terms of an agreement with Musk, said one person briefed on the matter, adding that a deal could be reached the same day.
The San Francisco company was forced to sit at the negotiating table with Musk on Sunday, days after the Tesla boss secured financing to pull off transactions few on Wall Street believed could be done.
Twitter’s decision to enter talks marked a huge shift by the social media company, which had previously launched a poison pill to block Musk from taking over the group.
Twitter did not immediately respond to a request for comment on Monday.
Musk launched a hostile offer of $54.20 less than two weeks ago, but Twitter’s shares have traded below that level, suggesting Wall Street was doubtful a deal would ever materialise. However, after weekend reports that Twitter’s board was now taking the offer more seriously, the stock rose 5 per cent to $51.47 in pre-market trading on Monday morning in New York.
Musk has said his swoop on Twitter is primarily motivated by an overhaul of its content-moderation policies and promoting what he described as free speech on the platform. Twitter has stepped up its response to abuse and extremist activity in recent years, including in January 2021 suspending the account of former US president Donald Trump.
On Friday, Musk presented a $46.5bn financing package, which included $25.5bn in debt from a group of banks led by Morgan Stanley, his financial adviser, and $21bn in fresh equity. The debt component includes a margin loan of $12.5bn against his Tesla shares.
If Musk’s bid is successful, the South African-born entrepreneur will be on the hook for $33.5bn of the financing package, although he could lower his exposure by bringing in co-investors to finance the equity portion of the deal.
More soon . . .