Nearly two weeks after Elon Musk stunned the tech world by announcing a bid to take over Twitter, the social media giant has begun negotiations with the Tesla CEO.
Reuters reported Twitter held talks with Musk on Sunday after he reached out to shareholders with details of his financing plan. Last week, Musk said he had lined up about $46.5 billion to buy Twitter.
After Musk announced his takeover bid, the Twitter board adopted a 'poison pill' strategy to prevent a hostile takeover.
Media reports had said Musk plans to finance his bid with backing of Morgan Stanley and other financial institutions. Reuters reported “Musk, chief executive of Tesla, has been meeting with Twitter shareholders in the last 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. Shareholders pushed Twitter to hold talks 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.”
Twitter's decision to engage with Musk, while not signifying a deal is imminent, is being considered a sign of flexibility from the company. “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 said. While the poison pill would prevent them tendering their shares, the company was worried that its negotiating hand would weaken considerably if it was shown to be going against the will of many of its investors,” Reuters reported.
Dan Ives, an analyst at investment firm Wedbush Securities,was quoted by BBC as saying the negotiations would be perceived “as the beginning of the end for Twitter as a public company, with Musk likely now on a path to acquire the company unless a second bidder comes into the mix”. Ives noted a hostile takeover attempt would place “further pressure on the board with their backs against the wall in this Game of Thrones battle for Twitter”.
