Twitter is reportedly on the verge of accepting Elon Musk’s $43 billion bid to take the social network private, according to a report.
Twitter may announce it has accepted Musk’s offer later on Monday once its board has met to recommend the transaction to Twitter shareholders, sources told Reuters. The talks are fluid and the deal could still fall apart, the sources added.
The Monday report by Reuters sent shares of Twitter soaring by more than 5% in premarket trading on Monday.
Twitter was unable to secure a so-called “go-shop” provision from Musk which would have allowed it to solicit other bids from potential buyers after the deal was signed, according to the report.
MORE: Twitter is in the final stretch of negotiations about a $43 billion sale to Elon Musk that could rank as one of the biggest-ever internet acquisitions
— Bloomberg (@business) April 25, 2022
Still, Twitter would be allowed to accept an offer from another party by paying Musk a break-up fee, the sources added.
The move comes after Musk reportedly met with several shareholders over the weekend and outlined the specifics of his $54.20 per share bid for the social media platform, according to Reuters. Musk’s outreach forced the company’s board of directors to seriously consider the Tesla CEO’s $43 billion takeover bid, the report said.
Many Twitter shareholders reached out to the company over the weekend after Musk outlined a detailed financing plan for his bid on Thursday and urged it not to let the opportunity for a deal slip away, according to Reuters.
Twitter’s board is concerned that its negotiating position would weaken if they defy their investors in the event Musk presents an attractive tender offer. Musk’s insistence that his bid for Twitter is his “best and final” has emerged as a hurdle in the deal negotiations, the sources said.
Twitter’s board is reportedly in talks with Musk in order to get more details on his bid and to see whether there is wiggle room to negotiate more favorable terms for the company, according to Reuters.
Twitter has not yet decided if it will explore a sale to put pressure on Musk to raise his bid, sources told Reuters.
Musk has an outstanding offer to buy Twitter and take it private in order to restore its mission of offering a platform for “free speech.” Initially, Twitter’s board resisted the offer and mounted a “poison pill” defense designed to dissuade Musk from mounting a hostile takeover bid.
Musk has threatened to put forward a tender offer that he could use to enlist the support of shareholders for his bid — a key factor that prompted the board of directors to seriously consider his offer.
The Wall Street Journal reported earlier on Sunday that Musk and Twitter would meet to discuss the acquisition offer.
The company’s board is reportedly seeking information about ongoing regulatory investigations into Musk, including by the Securities and Exchange Commission.
Investors have accused Musk of costing them billions by tweeting that he had secured funds to take Tesla private at $420 a share. The tweet prompted a class action lawsuit against Musk as well as an ongoing legal battle with the SEC.
The trial is expected to begin in January 2023.
The SEC is also investigating whether Musk violated rules by not disclosing that he had purchased shares of Twitter while amassing his 9.2% stake earlier this month.
Twitter is also looking into whether regulators in any of the major markets it operates would object to Musk owning the company, Reuters is reporting.