As Elon Musk continues to cast doubt on whether his takeover of Twitter will go ahead, the social media company is forging ahead. In a lengthy regulatory filing Tuesday, Twitter’s board of directors urged shareholders to vote in favor of the deal and provided a detailed look at how the board reached a deal last month with Musk.
The presentation detailed the breakneck pace at which the deal went through and the frequent shifts in Musk’s whims as he went from shareholder to board nominee to acquirer. It also showed Twitter’s continued commitment to the deal, even as Musk seemed hesitant: “This deal can’t move forward,” he said. tweeted early Tuesday morning, shortly before the presentation was published.
“Twitter is committed to completing the transaction at the agreed price and terms as soon as possible,” Twitter said in a statement accompanying the filing. Twitter’s stock value could decline significantly if the deal doesn’t go through, Twitter said. Its shares had already plummeted when Musk first disclosed his stake on Twitter, and are now well below the price he is offering in his takeover bid, a sign investors are doubtful it will close. a deal.
Twitter’s filing revealed new details about the negotiations to make the deal, including the role of Twitter co-founder and former CEO Jack Dorsey and Twitter’s discussions with other potential buyers.
Dorsey suggested to Musk that Twitter go private on April 5, shortly after Musk agreed to join Twitter’s board of directors, according to the document. Mr. Musk had taken a significant stake in Twitter and approached the company with suggestions for changes he believed he should make to his business. Although Musk said he was considering buying Twitter or launching a competitor, he agreed in late March that he would join the board.
But Musk’s thinking seemed to change after the conversation with Dorsey. The former Twitter executive, who argued that the social network should decentralize its business, said Twitter would be better able to execute its goals and plans if it went private and no longer had to answer to Wall Street. During the discussion, Musk asked Dorsey if he would remain on Twitter’s board after his term expired in May. Mr. Dorsey refused, according to the filing.
Shortly after their conversation, Musk turned down the position on Twitter’s board, saying he would instead make an offer to acquire the company.
Musk’s offer materialized with unusual speed, and he prompted Twitter’s board to accept it, publicly tweeting hints that he might launch a hostile takeover bid if the board didn’t agree to his terms through negotiations.
Behind the scenes, Twitter management and its bankers received interest from other “financial backers and institutional investors,” the company said in its filing, but no specific counterproposal was submitted by any of the interested parties.
How Elon Musk’s Twitter deal unfolded
A very successful deal. Elon Musk, the world’s richest man, has capped off what seemed like an unlikely attempt by the famously fickle billionaire to buy Twitter for roughly $44 billion. Here’s how the deal unfolded:
Twitter board chairman Bret Taylor also spoke with several of Twitter’s institutional shareholders to gauge their interest in Musk’s offer, according to the document. These shareholders said that Twitter had failed to execute on its past opportunities to grow the business, but that the recent replacement of Mr. Dorsey with a new chief executive, Parag Agrawal, could open them up to a plan to keep Twitter independent. But they also warned Twitter to consider Musk’s proposal, which values the company at $44 billion, against the risks of going ahead as a public company.
Those risks tipped the balance, Twitter said in its presentation. If a deal with Musk doesn’t solidify, other buyers could step in and offer a lower price. Shares of many tech stocks, including Twitter, have recently plunged, making a quick turnaround in the public market more challenging.
In recent days, Musk has suggested that the presence of bots and spam accounts on Twitter could allow him to back out of the deal or renegotiate its price. Twitter estimates that these accounts make up less than 5 percent of its platform, but Musk has suggested the total is much higher. An incorrect bot count could be grounds for ruling it out, Musk said Monday at a conference. But if Musk tries to leave, he could face a $1 billion breakup fee or, in certain cases, Twitter could sue him to pay the full price of the deal.