Twitter’s board of directors unanimously endorsed Tesla and SpaceX CEO Elon Musk’s bid to take over the company.
The board recommended that shareholders vote in favor of Musk’s $44 billion purchase of the company in an upcoming special shareholders’ meeting.
Specifically, the board requested shareholders to vote for the adoption of the “merger agreement” and “compensation that will or may become payable by Twitter to its named executive officers in connection with the merger,” Tuesday filings with the Securities and Exchange Commission showed.
The board also asked shareholders to vote for “the adjournment of the special meeting, from time to time, to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the merger agreement at the time of the special meeting.”
Should the purchase agreement be finalized, Twitter shareholders would each receive $54.20 per share without interest, the board members said, according to the Tuesday SEC filing.
Earlier that day, Musk told Bloomberg News Editor-in-Chief John Micklethwait at the Qatar Economic Forum that “unresolved matters” were hindering the completion of his purchase of the social media behemoth.
“There is the question of, will the debt portion of the round come together and then will the shareholders vote in favor,” Musk said, according to Bloomberg News.
Musk, in early May, announced that his deal to acquire the microblogging platform was “temporarily on hold.” A temporary 18 percent dip in Twitter stock prices followed Musk’s announcement.
The celebrity entrepreneur alleged that Twitter was not providing sufficient data backing its calculations that “spam/fake accounts do indeed represent less than 5% of users.”
Lawyers for Musk then sent a letter to Twitter requesting the data, warning that should Twitter not comply with the request, the deal could not go through, The Associated Press reported.
Twitter, according to The Associated Press, responded to the news of Musk’s letter in early June, saying that the company was sharing information with Musk “in accordance with the terms of the merger agreement.”
Adding that the current deal was in “the best interest of all shareholders,” the company said it intended “to close the transaction and enforce the merger agreement at the agreed price and terms,” according to the wire service.
Since announcing his takeover bid, Musk has hinted at changes Twitter could see once both sides complete the merger agreement.
The hinted changes include changes to the company’s remote working policy, potential layoffs and alterations to the social media platform’s infamous censorship policies that hitherto were used to silence conservative voices.
The most worrying change for Twitter employees has been the possibility of layoffs.
“Right now, costs exceed revenue,” Musk said during a Thursday meeting with Twitter employees. “That’s not a great situation.”
“There would have to be some rationalization of headcount and expenses to have revenue be greater than cost. Otherwise, Twitter is simply not viable or can’t grow,” Musk said, adding that “anyone who’s obviously a significant contributor should have nothing to worry about.”
“The agreement with Musk is that he would buy the company for $44 billion. Twitter’s current share value is $29 billion. So if the deal went through today at the agreed-upon sales price, each current shareholder would make just over $15 in profit per share,” Today’s Esquire Editor-in-Chief and Esquire Digital Head of Strategy Aron Solomon told the Western Journal.
“What this disparity really means is that unless Elon Musk has some great plan to acquire Twitter for the sale price and quickly get it from today’s share value to somewhere above the purchase price (that would be a pretty awesome trick) then it’s a money-losing proposition, at least at first,” Solomon said. “The plot here is definitely moving along.”
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