Twitter Reportedly Under Pressure From Shareholders, May Reconsider Deal With Elon Musk

Despite the world's richest person Elon Musk calling his $43 billion bid for the Twitter takeover his ¡®best and final offer,¡¯ Twitter is reportedly coming under increasing pressure from its shareholders to negotiate the takeover bid deal with Elon Musk.

This is as per what people familiar with the matter said yesterday, according to a report in TOI.

While the views of Twitter shareholders vary over what a fair price for a deal would be, many shareholders have reached out to the company after Musk outlined his acquisition financing plan last week.

The stated shareholders are said to have urged Twitter to not let the opportunity for a deal slip away, the sources said, speaking on condition of anonymity.

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Also Read: Elon Musk Says Twitter Board's Salary Will Be $0 If His Takeover Bid Succeeds

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 this Thursday.

Some shareholders who agree with that stance still want Twitter to seek a better offer from Elon Musk, sources told Reuters.

Are options available?

Reuters

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One option available to Twitter's board is to open its books to Elon Musk to try to coax him to sweeten his bid.

Another option would be to solicit offers from other potential bidders. While it is not yet clear which path Twitter will take, it is increasingly likely that its board will attempt to solicit a better offer from Musk even as it rethinks about the current one, the sources said.

"I wouldn't be surprised to wake up next week and see Elon 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." one of the fund managers who is invested in Twitter reportedly said.

Twitter shares had closed at $48.93 on Friday, a significant discount to Musk's offer that reflects the uncertainty over his bid's fate.

Another concern that Twitter's board is weighing is that unless it seeks to negotiate a deal with Musk, many shareholders could back him in a tender offer, the sources said.

While the poison pill would prevent Twitter shareholders from tendering their shares, the company is worried that its negotiating hand would weaken considerably if it was shown to be going against the will of many of its investors, the sources added.

Shareholders' reactions to the bid

"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, had tweeted last week.

I don't believe that the proposed offer by @elonmusk ($54.20) comes close to the intrinsic value of @Twitter given its growth prospects.

Being one of the largest & long-term shareholders of Twitter, @Kingdom_KHC & I reject this offer.https://t.co/Jty05oJUTk pic.twitter.com/XpNHUAL6UX

¡ª ?????? ?? ???? (@Alwaleed_Talal) April 14, 2022

"I would say, take the $54.20 a shame and be done with it," said Sahm Adrangi, portfolio manager at Kerrisdale Capital Management, a hedge fund that owns 1.13 million shares in Twitter, or 0.1516 of the company, and has been an investor since early 2020.

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