Elon Musk tweeted “Love Me Tender”, again hinting at the possibility of a hostile takeover of Twitter.
The billionaire published the text of Elvis Presley over the weekend in a potential offer to entice shareholders with a tender offer that could make him take control.
A tender offer will make him go around the board and go to the shareholders with his offer of $ 54.20 per share – but he will have to show how he will finance his offer.
He also seems to have offered to deprive board members of their salaries, saying they would receive “$ 0 if my offer succeeds.”
That’s when the social media giant filed its defense for a “poison pill” with the Securities and Exchange Commission today in a bid to thwart Tesla’s founder.
The plan is seen as a last-ditch attempt to prevent Musk from further increasing his stake in the company after his $ 43 billion offer last week.
Meanwhile, Jack Dorsey has targeted the company’s board, accusing it of “conspiracies and coups” that are “a constant dysfunction of the company.”
In a series of tweets and responses, the former CEO of Twitter supported a post saying that “a bad board will kill a company every time.”
Musk, the world’s richest man, currently owns a 9.2 percent stake in the technology giant and is trying to take it private with an unwanted offer of $ 54.20 a share.
The bosses reportedly brought in Goldman Sachs and JPMorgan Chase to advise him on how to respond to his offer.
Elon Musk (pictured last week) tweeted “Love Me Tender”, hinting at the possibility of a hostile takeover of Twitter
Twitter’s stock price remained below the level of Musk’s offer of $ 54.20 last week, which suggests that the market is not sure whether his offer will be accepted by the board
Elon Musk’s tweet “Love Me Tender” hints at a tender proposal … but what does that mean?
Elon Musk’s tweet Love Me Tender seems to hint at a tender offer to shareholders.
The 50-year-old simply tweeted “Love Me Tender” on Saturday afternoon with musical notes around him.
A tender offer, also known as a hostile offer, will get him around the board and go straight to shareholders with his $ 54.20 share offer.
But he will have to submit a form to the SEC for this, which means he will have to show how he will fund his bid.
This could be a problem for the Tesla billionaire, as it is not yet clear how he will pay for the deal to buy Twitter.
Musk’s tweet on Saturday afternoon was his latest hint that he would bypass the Twitter board and place his offer directly to shareholders.
On Thursday, after a TED statement, he tweeted: “It would be completely vulnerable not to put this offer to a shareholder vote.”
He later added that “the economic interests of the board are simply not in line with the shareholders.”
This morning, in numerous tweets, Musk hit the Twitter board, angered those who said his offer could not work and also praised an article in Bloomberg.
The Future Fund Managing Partner Gary Black tweeted: “Let me point out the obvious.
“If @elonmusk takes $ TWTR privately, the members of the TWTR board no longer have a job, which pays them $ 250K- $ 300K a year for what is a good part-time job.
Musk replied, “The salary on board will be $ 0 if my offer succeeds, so that’s $ 3 million / year saved right there.”
Another post on the social media website was in an article by Professor Scott Galloway of New York University that Musk could not afford to buy Twitter.
Musk replied, “Since he’s constantly making mistakes, it should be possible to do pretty well just by doing the opposite of what he recommends.”
Meanwhile, he also praised a piece written by Matthew Winkler for Bloomberg, entitled “In Defense of Elon Musk’s Management Achievements.”
Musk simply wrote, “Why, thank you, sir!”
The article says that the billionaire has a history of maximizing shareholder value.
It says, “Too often, Elon Musk makes the news for the wrong reasons by giving his opponents a steady stream of food to use against someone they say is little more than a self-absorbed corporate carnival barker.”
But he added: “Musk’s success as a prominent shareholder value maximizer proves otherwise.”
Poison pill plans use the threat of dilution to discourage ingestion
The Twitter board, meeting on Thursday afternoon, has decided to fight Musk’s proposal to take over the so-called “poison pill” provision, which will prevent Tesla’s CEO from increasing his stake in Twitter.
Also known as shareholder rights plans, poison pills usually trigger an automatic dilution of shares by flooding new shares if the corporate attacker’s share of ownership increases too large.
For example, if one shareholder reaches 15% ownership, a poison pill can be created to allow any other shareholder to buy a new issue of shares at a discount.
Knowing that such a plan could be triggered by increasing the cost of takeovers astronomically, the tenderer would be reluctant to take over the takeover without the approval of the board.
In the case of Twitter, the idea of such a plan would be to prevent Musk from increasing his stake by 9.1 percent to push the board to accept his deal.
Twitter submitted its plan for a “poison pill” to the SEC on Monday as it reaffirmed its attempt to block Musk from carrying out the $ 43 billion hostile takeover.
The document reads: “In connection with the adoption of the Rights Agreement, on 15 April 2022 the Board approved the Certificate of Rights, Preferences and Privileges of Participating Preferred Shares of Series A (“ Certificate of Indication ”), the rights, powers and preferences of preferred shares.
“The Certificate of Determination was filed with the Secretary of State of Delaware on April 18, 2022.”
The strategy, announced on Friday, triggers a dilution of the company’s shares if a shareholder accumulates a 15% stake without board approval.
But that doesn’t stop Twitter from accepting Musk’s offer or negotiating with him or other potential buyers.
However, this will prevent the billionaire from putting pressure on the board by buying more and more shares on the open market.
Twitter said its “poison pill” plan was “similar to other plans adopted by public companies in similar circumstances.”
It states: “The rights plan will reduce the likelihood that any legal entity, individual or group will gain control of Twitter by accumulating an open market without paying all shareholders an appropriate control premium.”
This means that if Musk or another person or group acquires at least 15 percent of Twitter’s stock, the “poison” pill will be triggered.
Any shareholder other than Musk will be allowed to buy new shares at half the market price, which was $ 45.08 at Thursday’s close.
The flow of shares at half price will effectively dilute his share of ownership, which will make it significantly more expensive for him to build a controlling position.
Twitter said its board voted unanimously in favor of the plan, which will remain in force until April 14, 2023.
Earlier, former CEO Dorsey left the board of directors on Twitter while responding to a series of unfriendly tweets.
Earlier, former CEO Dorsey left Twitter’s board of directors while responding to a series of unfriendly tweets.
Responding to a post on Saturday, he said: “When I was fired in 2008 and became chairman, the board took away most of my shares.
“In 2015, I returned 1% of the company back to the group of employees. So I ended up with very little company.
He also responded to a comment mentioning “conspiracies and coups” on the Twitter board, saying: “This is a constant dysfunction of the company.”
Earlier in the day, he responded to a post quoting a “Silicon Valley proverb” by venture capitalist Fred Destin.
It said, “Good advice doesn’t make good companies, but a bad board will kill a company every time.” Dorsey said, “Great facts.”
The 45-year-old entrepreneur is still on board, but is expected to leave when his term expires at the end of May.
The Twitter board is chaired by President Brett Taylor. Twitter CEO Parag Agraval and co-founder Dorsey also have seats on the board.
Graduates include MasterCard CEO Mimi Alemayehu, private investor Egon Durban, karaoke mogul Martha Lane Fox, former Google CEO Omid Cordestani, Stanford professor Faye-Faye Lee, venture capitalist Patrick Picheta, 1stDibs CEO Rose and 1stDibs CEO diplomat Robert Zoellick.
Despite Twitter’s latest move, Musk can still oppose the board and take power in a proxy battle by removing current directors – although this strategy could take years.
Earlier, Musk responded to reports that the board was considering a “poison pill” plan, tweeting: “If the current Twitter board takes action against the interests of shareholders, it will violate its trust.”
The Twitter board is led by Chairman Brett Taylor, who is also co-CEO of business software giant Salesforce.
Twitter CEO Parag Agraval (left) and co-founder Jack Dorsey (right) also have seats on the board.
“The responsibility they would take in this way would be titanic in scale,” he added, apparently referring to potential lawsuits by shareholders.
Musk shocked the world of technology on Thursday with an unsolicited offer to buy the company.
He said promoting freedom of speech on Twitter was a major reason for what he called his “best and last offer”.
The richest man in the world offered $ 54.20 per share, which the social media company estimates at about $ 43 billion, according to documents in the SEC on Thursday.
Musk told a conference hours later that he was “not sure” if he would succeed and acknowledged “Plan B”, but declined to give details.
But he hinted in the filing that a refusal would make him consider selling his shares.
Musk last week revealed a purchase of 73.5 million shares – or 9.2 percent – of ordinary shares on Twitter, which led to an increase in his shares by more than 25 percent.
The “rights plan” on board is triggered if the buyer takes 15 on …
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