Twitter has adopted a “poison pill” that is a routine defensive tactic in the face of acquisitions, restricting Elon Musk’s ability to increase his stakes on the social media site, just as an acquisition company emerged to compete with his $ 43 billion bid for Twitter.
Sources said Toma Bravo, a technology-focused private equity firm with assets under management of more than $ 103 billion, told Twitter that it was exploring the possibility of offering the offer.
However, sources who did not want to be identified as the matter was confidential said that the extent of the offer that Thomas Bravo could offer was unclear and it was not certain whether such a competitive offer would come to light.
A spokesman for Toma Bravo declined to comment, while Twitter representatives did not immediately respond to a request for comment. The New York Post reports that Thomas Bravo is considering buying Twitter.
The move raises fears of private equity firms competing on Twitter. The private equity sector has about $ 1.8 trillion in cash, according to data provider Brecken. Unlike large technology groups, most private equity firms do not face hopeless restrictions when it comes to Twitter.
It is still possible for a private equity firm to increase Musk’s offer by partnering with Musk instead of competing with him. Industry sources said that some private equity firms were wary of collaborating with Musk as he criticized Twitter for relying heavily on ads for revenue.
Twitter has more than $ 6 billion in its balance sheet and annual cash flow is approaching $ 700 million, which provides some relief to banks considering loans to support the deal. However, Twitter’s foreign acquisition could be huge, requiring the acquisition of several acquisitions and the cooperation of other large corporate investors.
Musk is the world’s richest man, Forbes magazine estimates his net worth at $ 265 billion. However, he set a limit on the amount he was willing to pay. He told Twitter on Wednesday that he would reconsider his position as a Twitter contributor if all his cash offer of $ 54.20 per share was rejected as the “best and last offer”.
Musk owns more than 9 percent of Twitter, making him the largest shareholder after the mutual fund company Vanguard.
On Thursday, Musk said Twitter contributors should comment on his offer on Twitter, and most users posted a poll agreeing with him. Twitter’s team is still evaluating Musk’s proposal and will not put the company’s shareholders to a vote until it is approved.
In a document he sent to the US Securities and Exchange Commission, Musk clarified that the offer was “excellent and final” and threatened to “reconsider his position as a contributor” on the social network if rejected. .
In a letter to Twitter CEO Brett Taylor, Musk confirmed that he had invested in the platform because of its key role in “free opinion around the world” and “a social positive for active democracies”.
“But since I invested, I have realized that the company has not grown and has not fulfilled its social obligation in its current form,” he added, suggesting that Twitter should be withdrawn from the New York Stock Exchange.
Shares of the company have plummeted, indicating that most investors expect a board of directors to reject Musk’s offer.
On Friday, Twitter said it had accepted the “poison pill” plan, which would reduce the stakes of anyone who raises more than 15 percent by selling more shares to other shareholders. Officially known as the Shareholders’ Stock Exchange, it is valid for 364 days. (Reuters)
