The Battle for Control of Twitter (TWTR) – Get Twitter, Inc. The report is shaping up to be a clash of titans.
One of those fights the likes of which Wall Street hasn’t seen in a long time.
Each day has brought its share of surprises since Elon Musk announced on April 14 that he had made a hostile bid of $43 billion, or $54.20 per Twitter share, to buy the social network .
The serial entrepreneur also said it was his “best and last” offer. However, he did not provide details on how he intends to finance the operation.
“I have sufficient assets to complete the transaction,” Musk said during a Ted Talk interview on April 14.
According to the Bloomberg Billionaires Index, Musk is the richest man in the world with an estimated fortune of $251 billion as of April 17. This wealth is mainly in stocks. He would therefore have to sell his Tesla shares or his SpaceX shares to have the money he needs.
But Twitter’s board of directors, for its part, launched a “poison pill” on April 15, the purpose of which is to make it more difficult for a potential buyer who owns 15% of Twitter to take control of the company.
The board has yet to decide on Musk’s offer, but it’s expected to be rejected in light of the poison pill.
The billionaire has decided to launch a Twitter campaign to gain public support for his bid.
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The standoff caused Wall Street to take sides. Goldman Sachs GS and JPMorgan Chase (JPM) – Get JPMorgan Chase & Co. Report, have sided with the board of directors they advise. Her rival Morgan Stanley (MRS) — Get Morgan Stanley’s report, advises Elon Musk. Jack Dorsey, the founder and former CEO of Twitter, appears to have sided with Musk by multiplying attacks on the board.
A strong financial partner
The markets are still undecided. If the Twitter action was well advanced when Musk announced that he had become a shareholder, the company’s action currently remains below the price bid by the billionaire. In general, this indicates that investors have doubts that the transaction will go through.
Shares closed April 18 at $48.45.
But things could change now, and very quickly.
In fact, according to The Wall Street Journal, Apollo Global Management is interested in funding a bid to buy Twitter and privatize the company. The fund is considering backing a potential deal for Twitter and could provide equity or debt to Musk or another bidder like private equity firm Thoma Bravo LP to support a bid, the newspaper said, citing sources who are close to the matter.
Participation may be in the form of loans or preferred stock.
Apollo management did not immediately respond to a request for comment.
Twitter is Elon Musk’s communication channel. In the social network, where he has more than 82.4 million followers, which corresponds to the population of Germany, the billionaire is building the Musk brand.
Twitter also allows the tech tycoon not to spend money on marketing and advertising as it is where he posts the news of his various companies – Tesla (TSLA) – Get Tesla Inc Report, SpaceX, The Boring Company, Neuralink – without paying a penny.
But Musk criticizes the principles of free speech on the platform. These criticisms became regular following Dorsey’s departure last November.