Twitter is finalizing an agreement to sell itself to Elon Musk, 11 days after the Tesla and SpaceX CEO stunned the industry by asking to acquire the firm for more than $41 billion.
According to the Wall Street Journal, an agreement might be reached as soon as Monday. Twitter has not responded to the allegations.
Musk stated last week that he had secured $46.5 billion in finance to buy the firm, prompting speculation that a transaction is near. Twitter’s board of directors met on Sunday to consider Musk’s offer to acquire all of the company’s shares that he doesn’t already hold for $54.20 each, according to a person familiar with the matter. According to the insider, conversations over Musk’s offer have become serious.
In the days after Musk’s takeover offer, speculation circulated over whether he would be able to fund his purchase of Twitter, particularly after he acknowledged in an interview the day of his offer, “I’m not sure I’ll really be able to buy [Twitter].”
Twitter (TWTR) stock has been trading at a discount to the offer price, perhaps indicating investor uncertainty about the merger. However, after the news, Twitter shares jumped over 5% to $51 per share on Monday morning.
If approved, the purchase would put the world’s wealthiest man in command of one of the most powerful social media platforms on the planet.
Musk has said many times in recent days that his objective is to strengthen free expression on Twitter and try to “unlock” the platform’s “amazing potential.”
“I invested in Twitter because I think it has the potential to be the global platform for free expression, and I believe free speech is a social requirement for a functioning democracy,” Musk said in his Twitter offer letter.
“However, after making my investment, I’ve realized that the firm, in its present form, can neither prosper nor fulfill this social necessity. As a private firm, Twitter must be altered.”
The board of Twitter put in place a so-called poison pill in the days after Musk’s approach, making it more difficult for Musk to purchase the firm without its consent. There was also speculation regarding whether the corporation would look for a new buyer.
However, according to CFRA senior equities analyst Angelo Zino, Twitter’s board of directors may be taking Musk’s offer more seriously since “an alternative proposal from a ‘white knight’ may be tough to come by, particularly given the recent decrease in asset values from social media businesses.”