In his new attempt to takeover Twitter, Elon Musk is turning to a bare-knuckled tactic more common to the corporate raids of the 1980s: A hostile takeover bid.
“I could technically afford it,” he said. But experts said that would most likely require him to borrow against his shares in electric carmaker Tesla and assets in civilian aeronautics firm SpaceX — a risky proposition for both Twitter and his other companies.Musk’s strategy is known as a “tender offer,” an appeal directly to investors to sell their shares at a premium in an effort to amass a controlling stake in the company.
But the authority rests with the board, which is elected by shareholders to carry out strategic decisions, said David Larcker, a professor at Stanford’s Graduate School of Business. Rarely does a board of directors put a major strategic decision to a shareholder vote, he said.“Inside the boardroom, what they’re trying to figure out is, “Here’s the offer we have on the table, here’s the strategy we have in place, and here’s what the value could be,' ” Larcker said.
Even if the board decides the Musk offer is too low, the presence of a serious bid could begin a process that ends in a significant change for the company. More often than not, hostile takeover attempts lead to a sale or some type of fundamental change in a company's direction, said Charles Elson, the founding director of the University of Delaware's Weinberg Center for Corporate Governance.
Twitter executives are reportedly considering a shareholder rights plan, often called a “poison pill,” to ward off Musk’s offer, according to the Wall Street Journal. The maneuver common to hostile takeover situations typically allows investors other than prospective purchaser to buy additional shares at a discount, thus diluting a purchaser’s holdings and making an acquisition attempt prohibitively expensive.
Musk said he is not buying Twitter to make money and does not intend to become the company’s sole owner. Instead, he said he wants to bring other investors into the company when he takes it private. “I will try to bring along as many shareholders as we are allowed to,” Musk said.
Deutschland Neuesten Nachrichten, Deutschland Schlagzeilen
Similar News:Sie können auch ähnliche Nachrichten wie diese lesen, die wir aus anderen Nachrichtenquellen gesammelt haben.
Twisty-Turny Elon Musk Drama Sparks Gallows Humor, Unease At TwitterInvestors shrugged off Musk's reversal over joining Twitter's board, but he and the company itself both signaled the commotion likely isn't finished.
Weiterlesen »
Lawsuit accuses Elon Musk of breaking law while buying Twitter stockElon Musk's huge Twitter investment took a new twist Tuesday with the filing of a lawsuit alleging that the colorful billionaire illegally delayed disclosing his big stake in the social media company so he could buy more shares at lower prices.
Weiterlesen »
Elon Musk accused of illegally delaying disclosure of Twitter sharesThe complaint accuses Musk of violating a regulatory deadline, allowing him to continue buying shares at a cheaper price.
Weiterlesen »
Tesla CEO Elon Musk offers to buy Twitter in cash dealElon Musk is offering to buy Twitter, just days after the Tesla CEO said he would no longer be joining the social media company's board of directors.
Weiterlesen »
Tesla CEO Elon Musk offers to buy Twitter in cash dealElon Musk is offering to buy Twitter, just days after the Tesla CEO said he would no longer be joining the social media company’s board of directors.
Weiterlesen »
If Elon Musk Goes Hostile, Twitter Is Missing A Key But Controversial DefenseUnlike many other Big Tech firms, Twitter doesn't have a dual-share class system, and it could wish it did if things go poorly with Musk.
Weiterlesen »