March 28, 2023

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Elon Musk makes an offer to buy Twitter: Live updates

Elon Musk makes an offer to buy Twitter: Live updates

credit…Laura Morton for The New York Times

Two people familiar with the situation said the Twitter board is considering a defensive move known as the poison pill that would severely limit Elon Musk’s ability to take over the social media giant.

The board met on Thursday to discuss Mr. Offer to buy the company, according to one person, who was not authorized to speak publicly. Directors are considering whether to go ahead with a pill — officially called an equity plan — that would limit the ability of a single shareholder, such as Mr. Musk, to get a critical mass of stock in the open market and force the company to sell.

Defending the poison pill is a common tactic used by companies that want to fend off unwanted takeover offers. It basically allows the company to flood the market with new shares or allow existing shareholders other than the potential acquirer to buy shares at a discount. This dilutes the bidder’s share and makes buying the shares more expensive.

The Wall Street Journal Previously mentioned That Twitter weighed a toxic pill.

If the Twitter Board of Directors rejects Mr. In Musk’s bid, he could make his bid directly to shareholders, rather than the board, by launching what’s called a bid offer. If other Twitter contributors like Mr. Musk’s offer, currently at $54.20 a share, could sell their shares directly to the billionaire, allowing him to take control of the company.

“It would be completely unjustified not to put this offer to a shareholder vote,” he said. Musk said in a tweet on Twitter Thursday. “They own the company, not the board of directors.”

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But Twitter investors on Thursday sounded frustrated with Mr. Try a mask, probably because of concerns about How will he finance it?. While the share of companies usually rises when there is takeover speculation, Twitter’s stock was down nearly 2 percent on Thursday.

Prince Alwaleed bin Talal of Saudi Arabia, who described himself as one of Twitter’s largest and most long-term contributors, said Twitter should reject Mr. caught because the width wasn’t high enough to reflectintrinsic valueThe company.

Other major shareholders of Twitter, according to FactSet, include The Vanguard Group, the company’s largest shareholder, with a 10.3 percent stake; Morgan Stanley Investment Management, with an 8 percent stake; and BlackRock Fund Advisors with a share of 4.6 percent. Vanguard and Morgan Stanley Investment Management declined to comment on Mr. try to catch. BlackRock did not immediately respond to requests for comment.

Mr. Musk refused a seat on the Twitter board Over the weekend, leaving the managers who had recently welcomed him in their ranks to evaluate the proposal in which Mr. Musk said he does not trust their management of the company.

The Board of Directors consists of Twitter Insiders, including Jack Dorsey, co-founder, and CEO, Parag Agrawal, as well as the independent directors.

Brett Taylor, co-CEO of Business Technology Salesforce, chairs the board. Mr. musk wrote mr. Taylor announced Wednesday night his intention to buy Twitter, according to a regulatory filing. “After the past several days of thinking about this, I decided I wanted to take over the company and take it private,” he said. Musk Books.

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Salesforce considered buying Twitter in 2016, but the deal never materialized. Mr. Taylor, who has been a Twitter board member since 2016, joined Salesforce a year later after it acquired his own company, Quip.

Another key player on the board is Egon Durban, co-chair of Silver Lake, a private investment firm. Mr. Durban joined Twitter’s board of directors in 2020 as part of a deal with the company With another active investor Who wanted to change the management of Twitter.

At the time, Silver Lake invested in Twitter and helped stabilize its management, preventing the immediate ouster of Mr. Dorsey. Because Silver Lake helped Twitter out of a difficult situation in the past, Mr. Durban may face questions about whether his company can double down and help fend off Mr. musk.

Mr. Dorsey can also influence the decision. He is friendly with Mr. musk and celebrate at first mr. Musk’s investment in the company and the decision to join the board of directors. but mr. Dorsey often delegated key decisions to his team, preferring to rely on their expertise. And Mr. Dorsey is also set to leave the Twitter board Next month, which may give him another reason to step aside.

His allies on the board are mr. Agrawal, who was appointed as his successor late last year, and Patrick Pichette, general partner at venture capital firm Inovia Capital and former chief financial officer at Google.

Mr. Agrawal and mr. Dorsey has been closely aligned with a vision of making Twitter technology more decentralized, and Mr. Beechette was a close confidant of Mr. Dorsey in discussions about Twitter’s long-term plan. Mr. Pichette may also have experience negotiating with Mr. Musk – Was on Google in 2013 when he was I thought about buying a Tesla.

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Mike Isaac Contribute to the preparation of reports.