Musk’s offer to purchase a private Twitter story is detailed in the new filing

Elon Musk’s official profile on the social network Twitter.

Rafael Henrique | Light Rocket | Getty Images

A new filing with the Securities and Exchange Commission sheds light on the Twitter executive’s early discussions with billionaire Elon Musk when he decided to join the board and later abandon that plan and attempt to take over the company.

The board eventually agreed to a $44 billion sale to Musk, though the Tesla CEO said the deal was on hold as he probed the number of spam and bot accounts on the platform.

Tuesday’s filing reveals a timeline of conversations from Twitter’s perspective leading up to the deal, beginning on March 26 when Musk reached out to former CEO Jack Dorsey “to discuss the future direction of social media.” On the same day, Musk also reached out to Twitter board member Egon Durban, and the two discussed the possibility of Musk joining the board.

The following day, Musk spoke to Twitter chairman Bret Taylor and CEO Parag Agrawal about his interest in Twitter and said he was considering joining the board, trying to take Twitter private, or starting a competitor.

After meetings with Musk among board members, including lawyers and bankers, they agreed that Musk would join the board in early April, subject to a background check and other standard procedures.

On April 4, Musk reached out to Dorsey on Twitter to share his perspective. Dorsey told Musk he personally believes Twitter is better equipped to focus on execution as a private company, the filing says. Musk asked if Dorsey would remain on the board even though he was already scheduled to leave, and Dorsey declined.

Shortly after that conversation, the board completed Musk’s background check, and his appointment to the board was scheduled to take effect on April 9. Up until that date, Musk and Agrawal continued to discuss Twitter’s business and products in anticipation of his new role at Planke. But before the appointment went into effect, Musk told Taylor and Agrawal that he would no longer be joining the board and would instead make an offer to take Twitter private.

That set off a hectic few weeks during which Musk made his “best and final” offer to buy Twitter for $54.20 a share. The board later passed a so-called poison pill, or shareholder rights plan, to prevent Musk from proceeding with a hostile takeover. But then he floated the idea of ​​a takeover bid and appealed directly to shareholders for a takeover, which in turn affected the calculus of Twitter’s board of directors’ decision to accept Musk’s initial bid.

In deliberating the offer, the filing said, Twitter’s board of directors considered its historical challenges in growing the company and also noted that it was “unlikely” that other potential buyers would be interested or in the know due to regulatory, financial and execution risks Would be able to buy Twitter. They also felt that Musk could launch an unsolicited acquisition and that Musk’s initial offer was likely “the best value Twitter could reasonably get from him.”

Ultimately, the board approved the deal. Later, on May 5, Musk publicly announced that he was in discussions with existing shareholders, including Dorsey, about retaining an interest in the newly merged company. According to the filing, Dorsey told the company about those discussions and that he might end up owning shares in the resulting company.

Since Musk made the offer, Twitter stock has fallen along with the broader market, leaving investors questioning whether the deal can still make it across the finish line. Musk hinted at an event that he might try to renegotiate the price.

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Correction: Egon Durban is a board member of Twitter. A previous version misspelled his name.

https://www.cnbc.com/2022/05/17/musks-bid-to-buy-twitter-private-story-detailed-in-new-filing.html Musk’s offer to purchase a private Twitter story is detailed in the new filing

Jane Marczewski

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