Twitter is poised to agree a sale to Elon Musk after he put together a $46.5bn (£36.4bn) funding package to acquire the social media platform, according to reports.
The company is close to agreeing to Musk’s offer price of $54.20 a share, multiple reports said on Monday, and an announcement could be imminent on a deal valuing the business at $43bn.
The Twitter board had initially signalled its opposition to Musk by adopting a poison pill defence against any unwanted takeover approach. But it appears to have changed its mind after the world’s richest man filed details of funding for his bid on Thursday, which was reportedly followed by meetings between the Tesla chief executive and Twitter shareholders.
Musk, a prolific and often controversial user of Twitter, could not resist tweeting about the platform on Monday afternoon when he wrote: “I hope that even my worst critics remain on Twitter, because that is what free speech means.” Shares in Twitter were up 5.6% at $51.68 in early afternoon trading in New York.
I hope that even my worst critics remain on Twitter, because that is what free speech means
— Elon Musk (@elonmusk) April 25, 2022
Musk flagged a potential hostile bid last week when he confirmed he was considering a tender offer for the shares in Twitter that he does not own, which would mean going around the company’s board or, in investment jargon, going “hostile”.
A hostile bid remains an option for Musk if official talks fail, although any tender offer would face a significant obstacle in the poison pill defence, which is designed to dilute the shareholding of anyone who buys more than 15% of Twitter without the board’s blessing.
The company’s decision to engage with Musk, taken earlier on Sunday, did not necessarily mean it would accept his $54.20 a share bid, sources close to the process told Reuters. It signified, however, that Twitter was exploring whether a sale to Musk was possible on attractive terms. Reuters added that Twitter also had concerns about deploying a poison pill stance if big shareholders back the bid. Musk owns 9.2% of Twitter, and Vanguard, a US asset management firm, is the largest shareholder with more than 10%.
Competition experts have said that US antitrust law is unlikely to represent a problem for Musk, who is also chief executive of the rocket company SpaceX and owns the tunnelling firm the Boring Company but whose business interests do not compete with Twitter in any markets. Nonetheless, Reuters reported that Twitter wants to know more about any active investigations by regulators into Musk, including by the US Securities and Exchange Commission, that might pose a risk to the deal.
Musk has more than 83 million followers and a penchant for shoot-from-the-hip tweeting, including a flurry of posts since his 9.2% shareholding first emerged this month that suggested changes to the platform. Some of the posts have been deleted but they included raising the possibility of an edit button for tweets – which Twitter confirmed it was considering – and removing adverts from the platform’s premium service, Blue (which is available in the US and Australia but not the UK).
However, Musk’s main ambition for Twitter under his ownership appears to be shaping the company to his vision as a self-confessed “free speech absolutist”. Musk said in a letter to the board this month that Twitter is “the platform for free speech around the world” but cannot achieve this “societal imperative” in its current form and “needs to be transformed as a private company”.
Representatives for Twitter and Musk did not immediately respond to requests for comment.