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Elon Musk’s Twitter takeover bid leaves Wall Street skeptical

Twitter’s board of directors is mooting Elon Musk’s $43 billion bid to buy the social media platform – but several analysts say company management is likely to reject the surprise offer.

The board said it would “carefully review the proposal to determine the course of action,” and met beginning at 10 a.m. ET to discuss the matter CNBC.

The company is also expected to discuss the situation with employees – some of whom are said to be concerned about Musk’s possible involvement – during an all-hands meeting later in the afternoon.

Musk noted that his cash offer of $54.20 per share represented a 54% premium to Twitter’s stock value before he began acquiring a 9% stake, but analysts at Jefferies expect a “no” to it the deal – on the grounds that the offer was simply too low to entice the board.

“While we view Musk’s engagement as a positive for the stock, we believe Twitter is likely looking for an offer above $60,” Jeffries analysts said in a note to investors.

They added that Twitter already has “strong technology leadership” from board director Bret Taylor, Facebook’s former chief technology officer.

Twitter CEO Bret Taylor.
Elon Musk informed Twitter CEO Bret Taylor of his intention to buy the company.
REUTERS

Musk has already indicated that he has no intention of sweetening his offer – telling Twitter’s board of directors that it was his “best and last” offer and that he would “reconsider my position as a shareholder” if it is rejected . Currently, Musk is the company’s largest single shareholder.

Investors initially reacted positively to Musk’s potential acquisition, but Twitter shares were trading slightly lower as of Thursday afternoon.

According to Jesse Cohen, a senior analyst at Investing.com, a rejection of Musk’s offer could spark an even more contentious battle over Twitter’s future in the coming days.

“Given the likelihood that Twitter’s board of directors will decline the offer, the question then becomes whether Musk would want to conduct a hostile takeover of the company.” Cohen to Reuters.

Twitter staff
Twitter is planning an all-hands meeting with employees later Thursday.
AFP via Getty Images

While Musk’s offer represented a premium to Twitter’s recent stock price, several analysts noted that the company’s shares have traded above $70 for the past year.

And so far, Musk and existing Twitter management have indicated that they have different views on how the company should operate going forward.

The Future Fund’s managing partner, Gary Black, gave “high odds” that Twitter’s board of directors would reject the offer. “Elon can expand his TWTR position as long as he discloses it. Likely Outcome: Other media outlets are likely to bid if TWTR is in play now.” Added black.

While many market analysts were skeptical of the offer, others argued that Musk’s deal is too good an opportunity for Twitter to pass up.

Wedbush analyst Daniel Ives is among those who expect the board to accept the offer – and expresses his view that a deal is “likely to go through”.

“It would be difficult for other bidders/consortium to get established and Twitter’s board will likely be forced to accept this offer and/or engage in an active process to sell Twitter,” Ives said.

“There will be a multitude of questions over the coming days about funding, regulation and balancing Musk’s time (Tesla, SpaceX), but ultimately it’s a ‘now or never’ offer for Twitter based on this filing.”

With postal wires

https://nypost.com/2022/04/14/elon-musks-twitter-takeover-offer-leaves-wall-street-skeptical/ Elon Musk’s Twitter takeover bid leaves Wall Street skeptical

DUSTIN JONES

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