Twitter’s board is said to take Elon Musk’s bid seriously

Twitter may come closer to an agreement with Elon Musk.

The board of the social media service met Sunday morning to discuss Mr. Musk’s unsolicited bid of $ 46.5 billion to buy the company, after he began setting up funding for his offer last week, said two people with knowledge of the situation. The funding was a turning point in how Twitter’s board viewed Mr. Musk’s bid of $ 54.20 per share, which allowed the company’s 11 board members to seriously consider his offer, the people said.

Twitter’s board planned to meet with Mr. Musk’s page later on Sunday to discuss other contours around a potential deal, said the people, who spoke on condition of anonymity because they were not authorized to discuss confidential information. These details include a timeline for closing any potential deal and any fees that would be paid if a deal was signed and then fell apart.

Any deal is still far from secure, but Twitter’s managed willingness to engage with Mr. Musk, the world’s richest man, represents a step forward. Mr. Musk, who has more than 83 million followers on Twitter and began collecting shares in the company earlier this year, declared his intention to buy the company on April 14 and take it private. But his proposal was quickly rejected by Wall Street because it was unclear whether he could come up with the money to make the deal. Twitter also used a “poison pill”, a defensive maneuver that would prevent Mr. Musk from collecting more of the company’s shares.

Mr. Musk updated his proposal last week, putting pressure on Twitter to take his bid more seriously. In a securities file released Thursday, Musk described how he had put together funding from investment bank Morgan Stanley and a group of other lenders, which offered $ 13 billion in debt financing, plus an additional $ 12.5 billion in loans to his Tesla warehouse, the electric car maker he drives. He was expected to add about $ 21 billion in equity financing.

Now what appeared to be a very unlikely deal may be more likely. The situation involving Twitter and Mr. Musk is still fluid and moving fast, said people with knowledge of the situation.

A Twitter spokesman declined to comment. In previous public statements, the company had said that the board “continues to conduct a careful, comprehensive and deliberate review to determine the course of action for the benefit of the company and all Twitter shareholders.”

Mr. Musk did not respond to a request for comment. The Wall Street Journal previously reported Twitter’s increased receptivity to Mr. Musk’s bid.

Wall Street would likely see the openness of Twitter’s board for Mr. Musk’s bid as “the beginning of the end for Twitter as a public company with Musk likely to buy the company unless a second bidder enters the mix,” Dan Ives , analyst at Wedbush Securities, wrote in a note Sunday.

Mr. Musk’s offer on Twitter is a premium of 54 percent over the share price the day before he started investing in the company at the end of January. But Twitter’s shares traded higher than Mr. Musk’s bid for much of last year.

Several analysts have said they expected Twitter’s board to only accept a bid that valued it at a minimum of $ 60 per share. Twitter’s stock rose above $ 70 a share last year when the company announced targets for doubling earnings, but has since fallen to around $ 48 as investors have questioned their ability to reach those targets.

Musk, 50, has made it clear that he sees many shortcomings of Twitter as a social media service. He has said that he wants to “transform” the company as a “platform for freedom of expression worldwide”, and that it requires major improvements in products and guidelines.

Musk has tried to negotiate with Twitter by using the service itself, and threatened in several tweets that he could take his bid directly to the company’s shareholders in what is called a “tender offer”. A tender offer is a hostile maneuver in which an external party circumvents a company’s board by asking shareholders to sell their shares directly to them.

He has also behaved erratically on the platform, raising concerns about how he can manage the service if he is in charge of it. On Saturday, Mr. Musk aimed at billionaire Bill Gates, and said that Mr. Gates had taken a “short” position on the share of Tesla, which meant that Mr. Gates bet that the car manufacturer’s shares would fall. On Sunday, Musk tweeted that he was “proceedingFrom mocking Mr. Gates.

Nevertheless, Mr. Musk maintains amicable ties with some senior members of Twitter. Over the weekend, Mr. Musk exchanged friendly tweets with Jack Dorsey, the company’s co-founder and board member. Mr. Dorsey resigned as Twitter’s CEO in November and will soon leave the board.

Both men share similar views on cryptocurrencies and on promoting more freedom of expression online. When Mr. Musk briefly flirted with joining Twitter’s board this month, Mr. Dorsey twitret“I’m very happy that Elon is joining the Twitter board! He cares deeply about our world and Twitter’s role in it. “

On Friday, Block, a finance company led by Dorsey, revealed that he had changed his title in the company from CEO to “Block Head”. That shift seemed to resonate with Mr. Musk.

“Your new title on Block is fire,” Musk tweeted to Dorsey on Saturday, using two flame emojis to mark his approval. Last year, Mr. Musk had changed the title of Tesla from CEO to technoking.