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Elon Musk, the world’s wealthiest man, is reportedly in talks with investors about joining his bid to purchase the social media platform Twitter.
A partnership could be announced in a matter of days, sources familiar with the matter told the New York Post. Musk initiated a bid to take over the social media giant earlier this week with an offer of $54.20 per share for all of Twitter’s shares, a bid worth more than $40 billion.
While Musk’s potential partners are unknown, sources told the post that one could be Silver Lake Partners, a company Musk has worked with in the past and is co-run by one of the members of Twitter’s board of directors. As the New York Post reported:
One possibility, the sources said: teaming with private-equity firm Silver Lake Partners, which was planning to co-invest with him in 2018 when he was considering taking Tesla private.
Silver Lake’s Co-CEO Egon Durban is a Twitter board member and led Musk’s deal team during the 2018 failed effort to take Tesla private, sources said. Silver Lake declined to comment.
The report of Musk’s strategizing comes after the Twitter board inserted a “poison pill” in its bylaws to stave off Musk’s hostile takeover. The Twitter board passed a shareholder rights plan on Friday that would allow board members to purchase additional stock at a discount if a single entity purchases a total of at least 15% of Twitter’s stock. As The Daily Wire reported:
Twitter’s desperate gambit on Friday to stave off Elon Musk’s bid for a hostile takeover is technically known as a shareholder rights plan, but investors call it a “poison pill.” Here’s how it works, and what might happen next.
A poison pill allows other shareholders – but not the would-be buyer – to scoop up newly minted shares at a discount, boosting their investments while forcing the target to swallow “economic poison” by having his shares diluted. The move is an unmistakable signal that the board is not interested in the prospective hostile acquiror, despite a potential profit for shareholders. If the maneuver succeeds, shareholders are certain to flood the courts with lawsuits, accusing the directors of Twitter of breaching their fiduciary duties.
There are three possible outcomes now, none of which are ideal for Twitter’s current board: Musk could win by successfully initiating a proxy contest to remove the directors and nix the poison pill; Musk forces the company to find a “white knight,” or alternative buyer, potentially at a higher price, thus making his shares more valuable; Musk walks away and leaves the company and the board facing a pile of lawsuits as shareholders blame them for hurting the value of their stock.