Twitter reportedly reconsidering Elon Musk’s $59B takeover bid

Twitter’s board is reportedly warming up to Elon Musk’s hostile takeover bid, after the billionaire announced he had secured financing for the proposed deal.

Twitter’s board is reconsidering Elon Musk’s AU$59 billion (US$43bn) takeover offer after he announced that he had secured financing for the bid, reports The Wall Street Journal.

The two sides are due to meet later today.

Twitter, which appeared unreceptive to the deal when Mr Musk first announced the bid earlier this month, is now reportedly taking a “fresh look at the offer and is more likely than before to seek to negotiate”, according to the report.

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Twitter is reportedly reconsidering a hostile takeover bid by Tesla chief Elon Musk. Picture: Jim Watson / AFP

This comes after Mr Musk publicly declined to join Twitter’s board, stepping away from the company’s announcement that he would be joining in light of his recent acquisition of Twitter stock that made him the company’s largest shareholder.

After this, he announced an unexpected hostile takeover bid, to which Twitter’s board introduced a “poison pill”, essentially barring Mr Musk from buying more than 15 per cent of the company by levying prohibitively expensive penalties.

Mr Musk is reportedly portraying Twitter’s decision to other shareholders as a yes-or-no question; whether it accepts his hostile takeover bid or not. On the other hand, Twitter is reportedly seeking other options, including leaving the door open for other bidders or negotiating terms other than price.

Mr Musk recently announced he had secured $64 billion (US$46.5 billion) in financing for the deal.

Mr Musk is the richest person in the world, and has accrued corporate fame from founding or co-founding companies such as PayPal, Tesla, and SpaceX.

Twitter, despite its large cultural footprint, pales in comparison to tech giants such as Facebook and Google. Twitter has 217 million ‘monetisable daily users’ according to the company, compared to Facebook’s 1.79 billion. Facebook’s parent company, Meta, has a market cap of $532 billion USD compared to Twitter’s $37 billion.

Twitter app logo. Picture: Kirill Kudryavtsev / AFP

Mr Musk has previously criticised what he perceives as Twitter’s lack of adherence to freedom of expression.

“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe,” Mr Musk wrote to Bret Taylor, Twitter’s chairperson, after announcing the hostile takeover bid. “I believe free speech is a societal imperative for a functioning democracy.”

In a TED talk after Twitter had announced Mr Musk would be joining its board, he criticised Twitter for its “black box” algorithm as being against the interests of freedom of speech.

“But just in general, like I said, it won’t be perfect, but I think we want it to really have the perception and reality that speech is as free as reasonably possible. And a good sign as to whether there is free speech is someone you don’t like allowed to say something you don’t like.”

He criticised the management of the company for this perceived fault.

“Since making my investment I now realise the company will neither thrive nor serve this societal imperative in its current form,” he wrote in the letter to Mr Taylor. “Twitter needs to be transformed as a private company.”

He has the eighth most followed Twitter account and often moves markets with his tweets.

The US Securities and Exchange Commission in 2018 fined Elon Musk $40 million USD and was made to step down as chairperson of Tesla after he tweeted that he would be taking Tesla private at $420 per share (a number commonly associated with the consumption of cannabis and a favourite of Elon Musk’s – his bid for Twitter values each stock at $54.20).

Investors did not know what to make of the announcement and rocked share prices.