Private equity firm Thoma Bravo is considering a bid for Twitter to match Elon Musk’s bid for the social media giant.
Thoma Bravo, which already owns other tech names McAfee, Landesk and Barracuda and has more than $103 billion in assets under management, has a team working on the possibility of acquiring the platform.
“They’re making a push,” a source told the New York Post.
It is currently unknown what the price of Thoma Bravo’s offer could be or when it will notify the Twitter board of its interest.
Private equity firm Thoma Bravo is considering a bid for Twitter to match Elon Musk’s bid for the social media giant
A source told the Post that should the company make an offer, it could be seen as a “white knight.”
Tesla CEO Musk launched a hostile takeover bid for Twitter on Thursday, insisting the platform needs to be transformed but acknowledging his $43 billion bid could fall through.
The world’s richest person bid $54.20 per share, valuing the social media company at around $43 billion in a filing with the Securities and Exchange Commission released Thursday.
Twitter’s board of directors met on Thursday afternoon and the company’s CEO, Parag Agrawal, 37, pictured speaking to employees afterwards
Musk said at a conference in Canada he was “not sure” he would be successful and conceded a “plan B” but declined to elaborate, though he noted in the filing that a rejection prompted him would sell his shares.
Twitter’s board of directors met Thursday afternoon, and the company’s CEO, Parag Agrawal, spoke to employees afterwards.
He told employees the company was still evaluating Musk’s $43 billion offer, according to The Verge. Songs like “I Say A Little Prayer” and “I Want It That Way” by the Backstreet Boys were played to staff members before Agrawal’s speech, the website reported.
Agrawal, 37, then held a 25-minute question and answer session. He didn’t say when the board would have an answer for Musk or what direction the board was headed — answers that The Verge said frustrated some employees.
The board will follow a “rigorous process” and make a decision “in the best interests of our shareholders,” he said.
Thoma Bravo sees potential for the company in buying Twitter in terms of controlling costs and increasing profit margins. Pictured is Orlando Bravo, co-founder of Thoma Bravo
Musk last week announced a purchase of 73.5 million shares — or 9.2 percent — of Twitter common stock, an announcement that sent shares skyrocketing more than 25 percent.
On Thursday, asset manager Vanguard Group increased its stake to overtake it as the largest shareholder.
Vanguard now owns 10.3 percent of Twitter, while Musk owns 9.1 percent of the company, making him the largest single shareholder.
Vanguard, led by CEO Tim Buckley, increased its stake in the company sometime during the first quarter, according to reports released on March 8.
According to FactSet, Vanguard previously reported owning 67.2 million Twitter shares, or about 8.4 percent of the company, at the end of December.
Vanguard CEO and Chairman Tim Buckley. His company has increased its stake in Twitter from 8.4 percent to 10.3 percent, meaning Vanguard now owns more shares than Elon Musk
Other large holders of Twitter stock include Morgan Stanley, Fidelity, and Black Rock.
Twitter’s board of directors said it will carefully review Musk’s “unsolicited, non-binding” offer and decide on a course of action that is “in the best interests of the company and all Twitter shareholders.”
Musk said he could “technically afford” the buyout without offering any financing information, though he’d likely have to borrow money or divest some of his mountain of Tesla or SpaceX stock.
Although he said he wants to take the company private, he said the firm will keep up to 2,000 investors — the maximum allowed.
“I would have to reconsider my position as a shareholder,” Musk said. Later Thursday, he said he wasn’t sure if he could acquire Twitter.
Shares of Twitter had a volatile trading day on Thursday, closing at $45.08 on concerns about Musk’s intentions
If Twitter rejects Musk’s deal, the stock price could plummet, and then an offer from the “white knight” would be useful.
Musk tweeted a poll Thursday afternoon, asking, “Taking Twitter private for $54.20 should be a matter for shareholders, not the board.”
Over 80 percent of the one million votes cast in the first hour said yes.
Musk then tweeted, “I love you.”
Thoma Bravo must show that he has his affairs in order and has worked out an alternative, “friendlier” offer.
“Our private equity investment vehicles share the same investment philosophy – partnering with and supporting existing management teams to help deliver solid operating results and drive innovation,” explains Thoma Bravo on his website.
The company typically invests in business-to-business software companies that deal with businesses rather than directly with consumers.
A source explained how Thoma Bravo finalized a $10.7 billion buyout agreement last month to acquire publicly traded Anaplan, a company that makes software modeling for various business outcomes.
Thoma Bravo sees potential for the company in buying Twitter in terms of controlling costs and increasing profit margins.
Twitter generates significant cash flow and isn’t a bad candidate for an acquisition, a source explained.
Musk’s move throws another curve in a rollercoaster ride for his volatile relationship with the global social media service and raises many questions about what’s next.
Musk would need to buy about 400.32 million additional shares worth about $15.3 billion to own 50 percent of Twitter
He was offered a seat on the board but turned it down over the weekend.
Musk continued to use Twitter as a stage to question whether the social media network is “dying” and to call out to users like singer Justin Bieber, who are heavily followed but rarely post.
“Most of these ‘top’ accounts tweet infrequently and post very little content,” the Tesla boss wrote, captioning a list of the 10 most followed profiles — including himself at number eight with over 81 million followers.
In other weekend tweets, Musk joked about dropping the “w” from Twitter’s name and turning its San Francisco headquarters into a homeless shelter “since nobody’s showing up anyway.”
He also suggested removing ads, Twitter’s main source of revenue.
Musk took to Twitter to consider giving a verified accounts tick to anyone who pays for premium subscription accounts, which cost $3 a month.
“I invested in Twitter because I believe in its potential to be the platform for free speech around the world, and I believe that free speech is a societal imperative for a functioning democracy,” Musk said in his filing.
Musk is breaking new ground as a business figure, even in the Silicon Valley world known for disrupting markets and transforming lifestyles.
The serial entrepreneur’s aspirations include transitioning to electric vehicles with Tesla, exploring private space and connecting computers to brains.
However, his behavior has raised eyebrows, inspired laughter, and sometimes resulted in a conviction or even a lawsuit.
“Popcorn time is over as we anticipate many twists and turns in the coming weeks as Twitter and Musk take this path of marriage,” Wedbush analysts said in a note to investors.