Reuters reports this morning that Twitter’s board may announce its acceptance of Elon Musk’s offer to buy Twitter for $54.20 per share.
The news agency quotes “people familiar with the matter” in its coverage and notes that those sources said the deal could still fall apart at the last minute.
The New York Times reports that Twitter’s board met with Musk on Sunday and discussions continued into the wee hours of this morning.
Musk acquired a 9.1% stake in Twitter on April 4, making him the company’s largest shareholder.
Twitter announced that Musk would join its board of directors; however, the Tesla CEO announced on April 9 via Twitter that he had declined the offer.
Had he accepted the board seat, Musk’s stake in Twitter would have been limited to a maximum of 14.9% for the duration of his tenure, plus 90 days.
Can Musk really afford to buy Twitter?
In short, yes.
But it will take creative financing.
And while most takeovers are largely funded by securing debt on the target company’s assets, Musk is said to have other plans.
Musk reportedly plans to fund two-thirds of the $46.5 billion financial package with his own assets.
Again citing sources familiar with the matter, Reuters reports that the banks involved have not seen enough cash flow on Twitter to justify taking more debt from it.
Musk’s share of the funding includes a $12.5 billion margin loan secured by his Tesla stock.
A regulatory filing indicates that if Tesla shares fall 40%, that loan repayment will come due.
Musk characterized the Twitter acquisition as “extremely important to the future of civilization” and indeed those numbers seem to indicate that potential profit is not its primary driver.
Whether or not a Musk-led Twitter holds the keys to civilization is debatable.
It would almost certainly change the platform for digital marketers.
A more open and less moderate Twitter could present greater risks for brands trying to navigate the channel of two-way communications and advertising with customers.
However, Musk’s experience in online payments could prove a valuable asset to Twitter, especially for its social commerce strategy.
Twitter set to accept Musk’s initial $43 billion offer, Reuters
Analysis: Musk rips buyout playbook with $46.5 billion in funding on Twitter, Reuters
Twitter nears deal to sell itself to Elon MuskThe New York Times
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