Elon Musk seems to be in no mood to forgo his bid to acquire Twitter even as the company’s management and other shareholders turn down his attempts at a hostile takeover. The richest man in the world took potshots at Saudi Prince Alwaleed bin Talal as the latter rejected the former’s offer to buy 100% stake in the social media major. Meanwhile, CEO Parag Agrawal assured Twitter employees that the company was not being “held hostage” by Musk’s offer.
Notably, as per a recent U.S. Securities and Exchange Commission filing, Pennsylvania-based investment adviser Vanguard group has replaced Musk as the largest shareholder in Twitter with 10.3% stake to its name, valued at $3.78 billion. Musk, however, remains the largest individual shareholder in the company.
“I don't believe that the proposed offer by Elon Musk ($54.20) comes close to the intrinsic value of Twitter given its growth prospects. Being one of the largest and long-term shareholders of Twitter, Kingdom Holding Company (KHC) and I reject this offer,” Talal tweeted.
He added that KHC owns 5.2% stake in Twitter, bringing the market value of the ownership to 3.75 billion riyals ($999.92 million).
Musk’s response came as a retort. “Interesting. Just two questions, if I may. How much of Twitter does the Kingdom own, directly & indirectly? What are the Kingdom’s views on journalistic freedom of speech?”
Musk also posted a Twitter poll “Taking Twitter private at $54.20 should be up to shareholders, not the board”, asking respondents to choose between “yes” or “no”. With seven hours left, the poll is decisively inclined towards affirmative.
Musk also referred to a Goldman Sachs report dated February 10, 2022, which shows a $30 price objective for the company’s share.
Meanwhile, Twitter CEO Parag Agrawal, during an internal all-hand meeting, encouraged employees to remain focussed and “we as employees control what happens”, a news agency reported.
On a question regarding Twitter’s take on why Musk was offered a seat on the board, Agrawal said that the board was acting in the best interest of its shareholders.
The chain of events began earlier this month when Musk emerged as the largest shareholder in Twitter after buying 9.2% stake in the company, over four times the 2.25% stake held by Twitter founder Jack Dorsey. The purchase made Musk eligible for a seat on Twitter’s board, which he declined. He had been advocating sweeping changes in the company, which he believes is necessary to uphold freedom of expression on the microblogging site.
On Wednesday, the Tesla CEO made an offer to buy 100% stake in Twitter for $54.20 per share in cash and take the company private. This amounts to a 54% premium before his investment in Twitter, and a 38% premium over the day before his investment was publicly announced.
In his letter to Bret Taylor, the chairman of Twitter board, Musk warned that refusal of his offer might lead to his exit from the company.
“If the deal doesn’t work, given that I don’t have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder. This is not a threat, it's simply not a good investment without the changes that need to be made. And those changes won't happen without taking the company private,” Musk said in a different communication to Twitter.
