Now That Elon Musk Has Offered to Buy Twitter, What Happens Next?

Elon Musk has offered to buy Twitter for about $ 43 billion. Here’s what happened – or could happen -:

The board reviews the offer. The board will work with its advisers at Goldman Sachs to review Mr. Musk’s offer. They will have to consider, among other things, whether the deal values ​​the company properly and whether Mr. Musk has the finances to do the deal together.

The board just can’t decide if it doesn’t like Mr. Musk is a contender, but he may come up with “reasons why he doesn’t like the bid,” such as, for example, his ability to fund it, said Steven Davidoff Solomon, a professor at the University of Lona school. California, Berkeley.

The board announces its decision. It will take a few days for the board to review the offer. If he rejects the offer, he can go one of several ways: he can put in a defense mechanism called a poison pill that limits Mr.’s ability. Musk and every other shareholder, to buy shares of Twitter in the open market.

Once he does that, he may still decide to sell himself, but without Shree’s pressure. Musk – or any other claimant – threatens to acquire a significant number of shares in the open market.

There are reasons why Twitter may choose not to take the poison pill. She may be wary of potential criticism that the poison pill is allaying the concerns of the loudest member of her community.

Similarly, Mr. Musk, whose last stake in Twitter was just over 9%, is encouraged to keep his share of Twitter below 10%. Once it reaches that threshold, how fast it can sell from the company is limited.

Assuming Twitter rejects the offer, Mr. Musk could increase his offer – even though he has already said he is the best and final. It can also take bids directly to other shareholders, known as a tender offer, in which it will buy shares from other shareholders.

However, at least one shareholder Already said Bids give the company a lower value.

The board probably looks for a white night. “Twitter is essentially for sale because they’ve gone public,” said Howard Birkanblitt, who heads Capital Markets Group at law firm Sullivan & Worcester.

Mr. Musk’s latest activity has probably added to the interest in the deal and the convenience of Twitter. Some private equity firms may close due to Twitter’s limited cash flow, but given the growing interest and reach of the social media giant, a number of technology companies may take a look.

There may be larger suitors. Recall that Microsoft, which owns LinkedIn, and Oracle both competed for a deal with video sharing company TikTok. However, given the scrutiny of large technical deals by the Biden administration, potential distrust considerations may be a significant deterrent.

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