(Slay News) – Elon Musk has activated his “Plan B” in the tech mogul’s battle to buy Twitter and is planning to take control of the social media company within ten days, according to reports.
Musk has been hinting that he is gearing up for a major move in his Twitter fight.
According to a new report from The New Post, Musk has tapped Morgan Stanley to help raise funds, around $10 billion, to mount a hostile takeover of Twitter.
The report says Musk is willing to invest up to $15 billion of his own cash and will make his move within 10 days.
To succeed Musk will need to get a majority of Twitter stockholders to agree to a tender offer made directly to them by Musk and his backers.
Then he could start a proxy fight to change the Twitter Board and remove the “poison pill.”
Musk hinted at this move over the weekend with a Twitter post that quoted Elvis Presley’s 1956 hit “Love Me Tender,” and another one alluding to ‘Tender is the Night.”
🎶 Love Me Tender 🎶
— Elon Musk (@elonmusk) April 16, 2022
_______ is the Night
— Elon Musk (@elonmusk) April 20, 2022
“The co-investors will, combined, have more equity than Musk but he will be the biggest single holder,” one source told the Post.
“Private equity firms don’t get paid for headline risk,” one source said hinting that Musk’s ability to create controversy may scare off some investors.
“A lot of private equity firms are doing the work and struggling on the valuation,” a source said.
“This is not growing like Instagram or TikTok.”
“You can only raise $10 billion of bank debt, and then maybe some preferred shares,” another source told the Post.
“Twitter does not have a whole lot of cash flow.”
Musk has promised to unlock Twitter’s potential and many of the backers of his earlier home runs, Tesla, and SpaceX may be his best option to raise the cash.
The board approved the poison pill “following an unsolicited, non-binding proposal to acquire Twitter,” the company said in a statement.
Twitter issued a statement that said:
“Twitter, Inc. (NYSE: TWTR) today announced that its Board of Directors has unanimously adopted a limited duration shareholder rights plan (the “Rights Plan”). The Board adopted the Rights Plan following an unsolicited, non-binding proposal to acquire Twitter.
“The Rights Plan is intended to enable all shareholders to realize the full value of their investment in Twitter.
“The Rights Plan will reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgments and take actions that are in the best interests of shareholders.
“The Rights Plan does not prevent the Board from engaging with parties or accepting an acquisition proposal if the Board believes that it is in the best interests of Twitter and its shareholders.
“The Rights Plan is similar to other plans adopted by publicly held companies in comparable circumstances.
“Under the Rights Plan, the rights will become exercisable if an entity, person, or group acquires beneficial ownership of 15% or more of Twitter’s outstanding common stock in a transaction not approved by the Board.
“In the event that the rights become exercisable due to the triggering ownership threshold being crossed, each right will entitle its holder (other than the person, entity or group triggering the Rights Plan, whose rights will become void and will not be exercisable) to purchase, at the then-current exercise price, additional shares of common stock having a then-current market value of twice the exercise price of the right.
“The Rights Plan will expire on April 14, 2023,” the statement said.
Interviewer: If they don’t accept your offer, you said you won’t go higher, is there a plan B?
Elon Musk: There is. pic.twitter.com/IMgKjLwnhj
— TheBlaze (@theblaze) April 14, 2022