House Republicans ask Twitter to preserve Elon Musk’s takeover bid records
Liz Peek and Kara Frederick weigh in on the war on free speech on ‘Fox Business Tonight.’
Initially hostile to the idea of Tesla CEO Elon Musk taking over Twitter, the company is reportedly warming up to the idea after the billionaire said last week he had secured the necessary $43 billion in funding.
Sources familiar with the matter told The Wall Street Journal that Twitter is taking another look at the deal and may be closer to negotiating, given how quickly Musk was able to secure financing.
FILE: Tesla and SpaceX CEO Elon Musk arrives on the red carpet for the Axel Springer media award in Berlin. (Hannibal Hanschke/Pool Photo via AP, File / AP Newsroom)
Still, any final deal is far from conclusive. Both sides were expected to meet Sunday to discuss the situation in more detail.
Musk announced an offer last week to buy the social media platform for $54.20 per share, but did not say how he would finance the acquisition.
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Musk said Thursday in documents filed with U.S. securities regulators that the money would come from Morgan Stanley and other banks, some of it secured by his huge stake in the electric carmaker.
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Twitter has enacted an anti-takeover measure known as a poison pill that could make a takeover attempt prohibitively expensive.
The company said in a statement Thursday that it received Musk's updated proposal and "new information on potential financing" and said its board is "committed to conducting a careful, comprehensive and deliberate review."
FILE: The Twitter icon is displayed on a mobile phone in Philadelphia on April 26, 2017. (AP Photo/Matt Rourke, File / AP Newsroom)
Musk, who owns about 9% of Twitter shares, indicated that he's exploring what's known as a tender offer in which he would try to get other shareholders to pledge their stock to him at a certain price on a certain date, bypassing the board. If enough shareholders agree, Musk could use that as leverage to get the board to drop its "poison pill" defense against his offer of $54.20 per share.
But Musk hasn't decided yet whether to do that.
The poison pill could significantly raise the costs of a takeover. If someone acquires a 15% stake in the company, it would trigger a huge payout to shareholders that could bankrupt Twitter.
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Other banks involved in Musk's financing include Barclays, Bank of America, Societe Generale, Mizuho Bank, BNP Paribas and MUFG. Morgan Stanley is one of Twitter's biggest shareholders, behind Vanguard Group and Musk.
CEO of Tesla Motors Elon Musk speaks at the Tesla Giga Texas manufacturing “Cyber Rodeo” grand opening party in Austin, Texas, on April 7, 2022. (SUZANNE CORDEIRO/AFP via Getty Images / Getty Images)
Musk's documents say that $13 billion in financing came from Morgan Stanley and the other banks. As much as $12.5 billion would be loans secured by Musk's Tesla stock, and he also committed $21 billion in direct or indirect equity, although he didn't disclose the source of those funds. The filing says that the equity commitment could be reduced by contributions from others or additional debt taken on.
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FOX Business has reached out to Twitter for comment but did not hear back before publication time.
The Associated Press contributed to this report.
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