Twitter Board Unanimously Approves Musk’s $44 Billion Deal, He Says Some Issues Are Still Unresolved
Twitter’s board recommended unanimously that shareholders approve the $44 billion sale of the company to Tesla CEO Elon Musk, according to a June 21 Securities and Exchange Commission (SEC) filing.
“The Twitter Board, after considering various factors described in the section of this proxy statement captioned ‘The Merger–Recommendation of the Twitter Board and Reasons for the Merger,’ has unanimously: (1) determined that the merger agreement is advisable and the merger and the other transactions contemplated by the merger agreement are fair to, advisable and in the best interests of Twitter and its stockholders,” according to the filing.
However, Musk reiterated that he still has concerns about the Twitter deal before it could go forward. Speaking at the Qatar Economic Forum the same day, he said there are still “a few unresolved matters.”
Notably, he said he is still “awaiting resolution” regarding the number of fake and spam users on Twitter — an issue that has put the deal on hold for weeks. Earlier this month, Twitter was to reportedly provide Musk access to the social media platform’s full set of internal data after he referred to the lack of said information as a “material breach” of his deal to buy Twitter.
“And that is a very significant matter,” Musk said at the Qatar Economic Forum.
Musk pumped the brakes on the deal by claiming that spam and bots accounted for at least 20% of users on the social media platform — a figure much higher than the “less than 5%” Twitter had disclosed in filings, as GOBankingRates previously reported.
Twitter’s stock price is currently around $39, well below the $54.20 per share offer from Musk.
Wedbush Securities analyst Dan Ives tells GOBankingRates that while shareholders will clearly approve this $44 billion deal, there is one major problem and elephant in the room.
He says, “Musk and his team are going through the ‘firehose’ of raw data related to the fake accounts/bots to determine the hot button 5% or less figure. To this point, with a $54.20 bid looming and Twitter’s stock currently under $39 the stock and Street are clearly highly skeptical of a deal happening at the current bid.”
Ives adds, “We believe the chances of a deal ultimately happening are currently at ~60% with a renegotiated bid at a lower price likely in the $42-$45 range due to the fake account issue.” He says there is still a 40% chance Musk decides to walk away from the deal, try to pay the $1 billion breakup fee, “and likely end up in a nasty court battle with Twitter’s Board for the coming months.”
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