Twitter starts takeover talks with Elon Musk

Svea Herbst-Bayliss and Greg RoumeliotisReuters
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Elon Musk has been meeting Twitter shareholders, seeking support for his bid.
Camera IconElon Musk has been meeting Twitter shareholders, seeking support for his bid. Credit: AP

Twitter has begun deal negotiations with Elon Musk after he wooed many of the social media company’s shareholders with financing details on his $US43 billion ($60b) acquisition offer, people familiar with the matter say.

The company’s decision to engage with Musk, taken earlier on Sunday, does not mean that it will accept his $US54.20 per share bid, the sources say.

It signifies, however, that Twitter is now exploring whether a sale of the company to Musk is possible on attractive terms.

Musk, chief executive of electric car giant Tesla, has been meeting Twitter shareholders in the past few days, seeking support for his bid.

He has said Twitter needs to be taken private to grow and become a genuine platform for free speech.

Many Twitter shareholders reached out to the company after Musk outlined a detailed financing plan for his bid on Thursday and urged it not to let the opportunity for a deal slip away, Reuters reported earlier on Sunday.

Musk’s insistence that his bid for Twitter is his “best and final” has emerged as a hurdle in the deal negotiations, the sources say.

Nevertheless, Twitter’s board has decided to engage with Musk to gather more information on his ability to complete the deal, and potentially get better terms.

Twitter wants to know more about any active investigations by regulators into Musk, including by the US Securities and Exchange Commission, that would present a risk to the deal being completed, one of the sources says.

The social media company adopted a poison pill after Musk made his offer to prevent him raising his more than nine per cent stake in the company above 15 per cent without negotiating a deal with its board.

In response, Musk has threatened to launch a tender offer that he could use to register Twitter shareholder support for his bid.

A concern that Twitter’s board weighed was that unless it sought to negotiate a deal with Musk, many shareholders could back him in a tender offer, the sources say.

Representatives for Twitter and Musk did not immediately respond to requests for comment.

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