Tender Offering: Musk Twitter Takeover
According to recent reports, Elon Musk's counteroffensive against Twitter may launch in less than two weeks.
The self-made billionaire's bid to buy Twitter to create a trustworthy free speech platform was complicated when the board. Known for taking different sides on many free expression issues, adopted a "poison pill" policy, diluting his share and, therefore, leveraging.
A yet-to-be-confirmed report indicated that Musk was looking to circumvent this effort by teaming up with additional investors. On Tuesday, Musk and his potential co-investors will be launching a tender offer for Twitter within 10 days or so.
This investor team-up will be "a complex deal that raises debt against both the company and possibly [Musk's] own stock and a giant cash equity infusion from co-investors," the Post reported.
"The co-investors will combine more equity than Musk, but he will be the biggest single holder," one of the Post's sources said.
A Sunday report from Bloomberg also indicated such a deal could soon be on the way.
"Musk may try to partner with investors including Oracle Corp., given that its chief executive officer, Larry Ellison, is on [Tesla] 's board, along with a group of private equity firms including Thoma Bravo, Bloomberg Intelligence analysts Mandeep Singh and Ashley Kim wrote Friday," the report noted.
"That partnership could raise the bid to $50 billion, they wrote."
In typical Musk-fashion, the billionaire playfully hinted he could soon be offering a tender offer directly to shareholders on Saturday with a tweet.
According to Investopedia, a "tender offer" invites "shareholders to sell their shares for a specified price and within a particular time window. The price offered is usually at a premium to the market price and is often contingent upon a minimum or a maximum number of shares sold."
Musk directly offering a deal to shareholders would constitute a "hostile takeover" of the company.
One expert who has accurately predicted many of Musk's moves thus far believes that the billionaire will reach his endgame in days.
"We're going to forget about Elon Musk and Twitter three, four, or five days from now if he allows it to go out of the news spotlight. So, I think he's got to make some exciting, quick moves if he has an ultimate endgame here," Solomon mentioned.
"And if that endgame is to acquire more than 50 percent of Twitter, it makes more sense to get those things in motion now."
"Like Elon Musk or not, we know that he can take something from zero to 60 very quickly, whether it's SpaceX or Tesla or anything that he wants to do."
