Twitter Inc (NYSE: NYSE:TWTR) company officials are reconsidering the offer from Tesla Inc (NASDAQ: TSLA) CEO Elon Musk to purchase the company for $43 billion.
What Happened: After initially rejecting Musk’s proposal, The Wall Street Journal reports that “the two sides” are meeting on Sunday to discuss the potential deal. According to WSJ sources, Twitter is taking a second look at Musk's takeover bid and the company is "more likely than before to seek to negotiate."
The Journal reports that Twitter is evaluating its own value to determine a fair purchase price, and may insist on "Musk agreeing to cover breakup protections," if a prospective deal isn't finalized. Sources tell WSJ that any agreement between Musk and Twitter is "still far from guaranteed."
During recent conversations between Musk and Twitter's chairman Bret Taylor, the Tesla CEO stood firm on his top offer of paying $54.20-a-share for the company, according to the Journal.
The news comes after Musk announced that he has the financial backing of a consortium of major financial institutions with $46.5 billion in debt financing to proceed with the purchase. The Tesla chief also indicated that he’s ready to go to shareholders with a tender offer if the Twitter Board continues to resist his advances.
The Board has gone as far as to institute a poison pill to limit Musk's ability to take ownership of the company by building his stake in Twitter stock. He currently holds 9.1% of Twitter shares, and the legal maneuver effectively keeps him from acquiring over 14.9% of the available stock on the open market.
Also Read: Twitter Buoyed By Elon Musk's Acquisition Plans: Here's What Lies Ahead For The Stock
Why It Matters: This latest development is likely to ratchet the pressure on the company’s Board. Twitter is expected to release financial results for the first quarter on Thursday, April 28, before the market opens.
Twitter company officials will host a conference to discuss the results at 8 a.m. EDT on Thursday. The topic of Musk’s purchase offer and the company’s tactics in response to his proposal will likely be a key part of the conversation.
Price action: Twitter shares were up 3.93% on Friday, closing at $48.93, according to Benzinga Pro.
Photo: Created with an image from Daniel Oberhaus on Flickr
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