The battle for control of Twitter (TWTR) – Get Twitter, Inc. Report is shaping up to be a battle of titans.
One of those fights like Wall Street hasn’t seen in a long time.
Every day has brought its share of surprises since Elon Musk announced on April 14 that he had made a hostile offer of $43 billion, or $54.20 per Twitter share, to buy the social network.
The serial entrepreneur also said it was his “best and final” offer. However, he did not give details on how he intends to finance the operation.
“I have sufficient assets to complete” the transaction, Musk said during a Ted Talk interview on April 14.
Musk is the richest man in the world with an estimated fortune of $251 billion as of April 17, according to Bloomberg Billionaires Index. This fortune is mainly in equities. He would therefore have to sell his Tesla shares or his SpaceX shares to have the cash he will need.
But for its part, Twitter’s board of directors implemented a “poison pill “on April 15, the purpose of which is to make it difficult to take control of the company for a potential buyer holding 15% of Twitter.
The board has yet to decide on Musk’s bid, but it’s expected to reject it given the poison pill.
The billionaire has decided to launch a Twitter campaign to win public support for his bid.
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The standoff pushed Wall Street to take sides. Goldman Sachs GS and JPMorgan Chase (JPM) – Get JPMorgan Chase & Co. Report have sided with the board of directors they advise. Their rival Morgan Stanley (MS) – Get Morgan Stanley Report advises Elon Musk. Jack Dorsey, the founder and former CEO of Twitter, seems to have taken up Musk’s side by multiplying attacks on the board of directors.
The markets are still undecided. If the Twitter action progressed a lot when Musk announced that he had become a shareholder, the group’s action currently remains below the price offered by the billionaire. Generally, this suggests that investors doubt that the transaction will go through.
The shares closed at $48.45 on April 18.
But things could now change, and very quickly.
Indeed, Apollo Global Management is interested in helping finance an offer to buy Twitter and take the company private, according to The Wall Street Journal. The fund is considering backing a potential deal for Twitter and could provide Musk or another bidder like private-equity firm Thoma Bravo LP with equity or debt to support an offer, the newspaper citing sources close to the matter.
The participation could come in the form of credit or preferred equity.
Apollo Management did not immediately respond to a request for comment.
Twitter is Elon Musk’s communication channel. It is on the social network, where he has more than 82.4 million followers, the equivalent of the population of Germany, that the billionaire builds the Musk brand.
Twitter also allows the tech tycoon not to spend money on marketing and advertising since he announces there the news of his various companies — Tesla (TSLA) – Get Tesla Inc Report, SpaceX, The Boring Company, Neuralink — without having to pay a penny.
But Musk criticizes the principles of free speech on the platform. These criticisms became regular after Dorsey’s departure last November.