Elon Musk’s $43 Billion Offer to Buy Twitter: What Happens Now?
In a surprising turn of events, Elon Musk has offered to buy Twitter. The offer comes in at $54.20 per share, or about $43 billion. This would give Musk control of one of the largest social media platforms in the world.
What happens next as Twitter reviews Musk’s offer?
Two weeks ago, Elon teased plans to create a new social media platform after criticizing Twitter for promoting censorship and propaganda.
Musk has long been a critic of Twitter, and recently called it the Internet’s town square. He has also been an advocate for free speech, which is something that Twitter has frequently come under fire for.
So what happens now? Will Twitter seriously consider Musk’s offer?
The board reviews the offer.
The board will consult with its advisers at Goldman Sachs to review Musk’s offer. They will have to consider whether the deal fairly values the company, and whether Musk has the assets to do the deal.
The board cannot simply decide it does not like Musk, but must “come up with reasons why they don’t like the bid,” said Steven Davidoff Solomon, a professor at the School of Law at the University of California, Berkeley in an article for The New York Times.
The board announces its decision.
The board will likely take a few days to review the offer, and announce a decision as early as this Friday.
It is unlikely that the board will accept Musk’s offer, as at least one shareholder has said it undervalues the company.
However, it is not impossible.
Other suitors make offers.
Musk’s latest activity has heightened interest in Twitter’s openness to a deal. While some private equity firms may be critical of Twitter’s limited cash flow, a number of technology companies have been looking to acquire Twitter since it’s early days.
“Twitter has essentially been for sale since they went public,” said Howard Berkenblit, who leads the Capital Markets group at law firm Sullivan & Worcester in an article for The New York Times.
The next suitors could be very, very big. Microsoft and Oracle both tried to acquire TikTok, and there are more than a few private investors who would love to add Twitter to their portfolios.
The most significant deterrent is the potential government scrutiny of any deal involving tech giants, given the Biden administration’s scrutiny of big technology deals.
What do you think?
Do you think Elon Musk’s offer to buy Twitter is serious? Do you think the board will accept? Let us know in the comments!
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