Twitter has been making the headlines consistently over the past weeks, something you can thank Elon Musk for. Now, the “best and final” offer of the Tesla and SpaceX chief to acquire the popular social media titan has opened up a new chapter in Twitter’s saga – going private after being acquired for a humongous sum of money. And there are several suitors.
Once again, it is Musk who started this all, and now, it seems that he is willing to invest an amount between $10-15 billion from his own pocket to acquire Twitter and unlock its “extraordinary potential.” He is currently the second-largest shareholder of Twitter (after Vanguard) with a stake of 9.2%. According to the New York Post, he is planning to launch a tender offer in about ten days and raise an additional $10 billion in debt with Morgan Stanley.
This comes after the billionaire had tweeted “Love Me Tender,” a song sung by Elvis Presley back in 1956. Is this a coincidence? You decide.
It seems that Musk might be open to borrowing amounts against his stake of 9.2% as well, which could raise several billion dollars. Of course, he can also up his stake beyond 15%, which is the cap for all members of the board of Twitter, and Musk had refused to join the board.
Twitter does not seem open to Musk’s offer and has adopted a “poison pill” strategy to protect itself from the buyout offer. The “poison pill” works like this – if any shareholder has a stake of over 15% in Twitter, then the board can grant shareholders (as of April 25) the right to buy one-thousandth of a share of preferred stock for each common share they own, at a price of $210.
Musk’s initiative to acquire Twitter has opened the floodgates for other private firms to throw their hat in the ring as well. This includes Thoma Bravo, a 14-year-old American private equity firm, which aims to explore a buyout of Twitter and challenge Musk’s “best and final offer” of $43 billion ($54.20 per Twitter share).
It seems that the firm, which has over $103 billion in assets, had approached Twitter regarding the same last week, though it is not known exactly how much it will shell out to grab what seems to be the apple of Musk’s eye.
Another alternative investment management firm and Yahoo owner, Apollo Global Management, is also mulling over a deal to acquire Twitter and is willing to work with other bidders to support an offer.