Twitter Shares Rise By More Than 5% Amid ‘Imminent’ Sale To Elon Musk

Twitter shares jumped by more than 5% before market opened on Monday as reports said the company is close to making a deal on its sale to billionaire businessman, Elon Musk, which could be announced any day from Monday.

The company is in advanced discussions with Musk, who had offered to buy the company at the price of $54.20 per share earlier this month.

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Both sides are said to have worked through the night to reach a deal that will value each share at the same price Musk proposed, reports the Wall Street Journal.

There are, however, no guarantees that a deal will be reached by both parties.

Twitter is meant to report first-quarter earnings on Thursday and is expected to chime in on the bid by then, if not sooner.

The potential turnabout from Twitter came after Musk met privately with several shareholders of the company on Friday to reiterate the virtues of his proposal while repeating that the board has a “yes-or-no” decision to make, according to people familiar with the matter.

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He also pledged to solve the free-speech issues he sees as plaguing the platform and the country more broadly, whether his bid succeeds or not, they said.

Musk made his pitch to select shareholders in a series of video calls, with a focus on actively managed funds, in hopes that they could sway the company’s decision.

Musk said he sees no way Twitter management can get the stock to his offer price on its own, given the issues in the business and a persistent inability to correct them.

It couldn’t be learned if he detailed specific steps he would take, though he has tweeted about wanting to reduce the platform’s reliance on advertising, as well as to make simpler changes such as allowing longer tweets.

THE WHISTLER reported that Musk announced that he had secured $46.5 billion in financing dedicated to his Twitter takeover bid.

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The Tesla CEO revealed in a Securities and Exchange Commission (SEC) filing on Thursday that he had secured commitment letters to finance the deal, including debt commitment letters from Morgan Stanley as well as other unnamed financial institutions, and one equity letter from himself.

Although Musk is currently the richest person in the world, the majority of his wealth is tied up in Tesla stock, which raised questions as to whether he would even be able to acquire the company. Musk even confirmed the skepticism when he said in an interview that, “I’m not sure I’ll actually be able to acquire (Twitter).”

A spokesperson for CNN, Brendan Lee, said the company had received the “updated, non-binding proposal” from Musk as well as the “new information on potential financing.”

“As previously announced and communicated to Mr. Musk directly, the Board is committed to conducting a careful, comprehensive, and deliberate review to determine the course of action that it believes is in the best interest of the Company and all Twitter stockholders,” Lee said.

Musk had said, “Since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.

“My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder,” he said in a letter to Twitter Chairman, Bret Taylor.

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Musk became the largest shareholder in Twitter after acquiring a 9.2% stake in the company. Following that, Twitter CEO, Parag Agrawal, revealed that Musk would be joining the board of Twitter as a member, to which Musk replied that he was looking forward to it.

Musk later made a U-Turn and rejected the offer to join the board. The move meant that he could buy as many shares in the company as he wanted because he would not be subject to an agreement that Twitter has with its board members that limits them to owning a maximum of 14.9% stake in the company.

Afterward, Musk was sued by former Twitter shareholders who claim that they missed out on the jump in the company’s stock price because he delayed in revealing that he had acquired a large stake in the microblogging platform.

The shareholders filed a proposed class action in Manhattan federal court, New York, where they said Musk made “materially false and misleading statements and omissions” by not revealing he had invested in Twitter by March 24 as federal law requires.

Following Musk’s disclosure of how much Twitter stake he purchased, its shares rose from $39.31 to $49.97 which investors saw as a vote of confidence from him.

The company had implemented a “poison pill” which would prevent anyone from amassing more than a 15% stake in the company by allowing other shareholders to buy additional shares at a discounted price, in an attempt to thwart Musk’s takeover bid.

It was also revealed that a private equity firm had approached Twitter, saying that it was exploring the possibility of putting together a bid to counter the one Musk had presented.

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