Twitter Inc (NYSE:TWTR)’s board said Tuesday that it unanimously accepts Elon Musk’s $44 billion takeover bid and recommends that shareholders approve it at a future meeting. The information was made public via a document by the Securities and Exchange Commission (SEC).
Approval
As reported by the New York Post, the Twitter board unanimously, “has determined that the merger agreement is advisable and that the merger and the other transactions contemplated in the merger agreement are fair, advisable, and in the best interest of Twitter and its shareholders”, according to a filing to the regulator.
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Musk, meanwhile, remains unconvinced he will actually buy Twitter at the promised price, as shares are trading well below his $54.2 offer and he continues to fuel uncertainty. At an event organized by Bloomberg in Doha on Tuesday, the tech billionaire said there are still three issues to be resolved to close the purchase: fake accounts, financing, and approval by shareholders.
The volume of fake accounts is the main issue that has cooled down Musk’s offer made before the collapse of the market and, in particular, of tech stocks. The richest man in the world has insisted on Tuesday that he does not trust the company's data.
"Fake accounts and spam Twitter says they are 5%, but it is not our experience," he pointed out in Doha.
Conditions
Musk launched his offer without doing a thorough review of the company —common procedure in this kind of operation— and it will be difficult for him to use that as an argument to back down.
The billionaire signed a clause by which he would pay $1 billion should the deal not close, but it is possible that Twitter could also sue him to enforce the contract by which he promised to pay some $44 billion to take over the business.
In addition to the fake accounts, which are "still a very significant issue," according to Musk, the businessman added: "And, of course, there is the question of whether the part of the debt [to finance the operation] will be raised and whether the shareholders They will vote for it."
The businessman continues to refuse to take the operation for granted, which fuels speculation that he will try to lower the price or back out.
As for the shareholder vote, there should be little doubt, since the shares are trading 30% below the offer price and voting in favor means big profits.