Yesterday Elon Musk made public an unsolicited proposal to take Twitter private for $43 billion. Musk went hostile in an uncharacteristically traditional way for him – a text, a “voice script,” a letter and an SEC filing.
Opinions on the matter abound, but here are three of the main questions we see right now:
Corporate Governance. Since the news broke of Mr. Musk’s investment, the company’s board has dealt with one quandary after another. As The Information points out, there are questions about when the board first learned about the position, and when board seat discussions began. Breakingviews’ Robert Cyran is more direct, criticizing the “hasty” decision to offer a board seat – a move he believes exposes poor corporate governance. Now the company is reportedly weighing exercising its poison pill to prevent Musk from increasing his stake.
Funding Secured? Musk’s filing says he plans to buy 100% of Twitter. He doesn’t disclose how he plans on financing the deal or whether he has a partner in the endeavor. Although few have questioned Musk’s ability to get the needed financing, it has been noted that even for the world’s richest man, coming up with $43 billion in cash will be no easy task.
Is 54.20 enough in any case? Investors don’t seem sold. TWTR closed on Thursday at $45 dollars, suggesting little enthusiasm from investors on the proposal’s prospects (TSLA, as a sidenote, lost almost 4% on the day). Commentators have suggested that the offer price is low enough for the board to reject Musk’s “best and final” offer.
Enjoy the holidays,
The GPP Team
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The Information: What Did Twitter’s Board Know About Musk’s Buying—And When Did They Know It?
There are questions about the actions of Twitter’s CEO Parag Agrawal and the board—in particular, when exactly the board initially agreed to Musk’s appointment. Read More
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Breakingviews: Flighty Musk Exposes Twitter’s Flaky Governance
The world’s richest man on Saturday bailed on becoming a director just days after agreeing to do so. The board’s haste in inviting him in reflects poorly on the $37 billion company. Read More
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Wall Street Journal: Elon Musk Makes $43 Billion Bid for Twitter, Says ‘Civilization’ At Stake
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Reuters: Saudi Prince Alwaleed Bin Talal Rejects Elon Musk's Twitter Takeover Bid
Saudi Arabian investor Prince Alwaleed bin Talal said on Thursday that as one of the major shareholders in Twitter he rejected a takeover bid by billionaire entrepreneur Elon Musk. Read More
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Financial Times: Twitter/Elon Musk: Is Funding Secured This Time?
Let us see if Elon Musk has leant anything. Four years ago, the Tesla chief executive loosely offered to take his electric vehicle company private, at one point misleadingly posting a tweet that he had "funding secured" for such a transaction. Read More
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Barron’s: Investors Know Little About ESG, a New Study Finds
Environmental, social, and governance, or ESG, investing is a hot trend, but retail investors are unfamiliar with the approach and have a hard time explaining what it means. Read More
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Bloomberg: Southwest Gas Holders Weigh In on Boardroom Fight With Icahn
Cohen & Steers now says it’ll back Icahn’s board slate next month. Another shareholder is questioning why the company snubbed Icahn when he was offering better terms than it got for $400 million in equity to finance its Questar acquisition. Read More
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Financial Times: The Rise of Conservative Shareholder Activism
Conservative shareholder activists in the US have filed a record number of proposals this year as they try to counter what they call “woke-ism” in corporate America. Listen here
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Financial Times: Activist Investor in Peloton Takes Aim at New Chief Executive
The activist shareholder who called in January for Peloton to fire co-founder John Foley has taken aim at its new chief executive, arguing that Barry McCarthy has failed to reform the company’s governance or justify its continued independence. Read More
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Reuters: Franchise Group Joins Bidding for Kohl's
Franchise Group Inc, owner and operator of retail stores such as The Vitamin Shoppe and Buddy's Home Furnishings, has entered the race for Kohl's Corp with a $9 billion indicative offer. Read More
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Meeting in San Francisco, the Eighth Annual Berkeley Spring Forum on M&A and the Boardroom hosted by Ethan Klingsberg of Freshfields and Steven Davidoff Solomon of the University of California, Berkeley
is the preeminent West Coast gathering of regulators, investors, executives, practitioners, and academics. It will feature conversation on the M&A landscape, recent M&A caselaw and antitrust. The Forum is hosted by Berkeley Center for Law and Business and Gladstone Place Partners is an event sponsor.
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Hosted at the Marriott at the Brooklyn Bridge, this event will feature 400+ CEOs and senior-level executives from business, finance and Government, focused on building networks, collaboration and creating a blueprint for a commercially successfully transition.
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