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Highlights
- According to media reports, Apollo Global has shown an interest in assisting with a Twitter acquisition.
- Last week, Musk offered to purchase Twitter Inc. for US$43 billion.
- Last Friday, Twitter Inc implemented a “poison pill” strategy, making it impossible for Musk to expand his shareholding over 15%.
According to media reports, Apollo Global Management Inc. has expressed interest in assisting in financing a bid for Twitter Inc. in response to Elon Musk’s US$43 billion unsolicited offer to take the business private.
Apollo Global is an alternative investment management organisation based in the United States.
Apollo intends to back a prospective sale for Twitter by offering equity or financing to Elon Musk or another bidder, such as private-equity company, Thoma Bravo LP. Moreover, credit or preferred equity might be used to fund the participation.
Twitter shares rose the most in two weeks on Monday following their “poison pill” defence to thwart Musk’s attempt to take the entity private for US$54.20 per share.
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What is going on with the Twitter bid?
Last week, Musk offered to purchase Twitter Inc. for US$43 billion. He claimed he is the man capable of unlocking the “extraordinary potential” of the revolutionary communication platform used by over 200 million people each day.
Source: © Manovankohr | Megapixl.com
Billionaire entrepreneur Musk was ready to pay US$54.20 per share for Twitter, which was 38% more than the price on 1 April 2022, the last trading day before Tesla CEO made the investment plan public.
Elong Musk disclosed the planned purchase in a filing with the Securities and Exchange Commission in the United States. Musk, who also owns Tesla, declared around 9% investment in the firm on 4 April, making him the firm’s largest shareholder. Following Musk’s move, Tesla shares dipped on concerns that his bid to purchase Twitter would be a distraction.
Twitter responded to Musk’s effort by saying its board will evaluate the proposal and that any response will be in the best interests of Twitter’s investors.
What is Twitter’s “poison pill” strategy?
Twitter Inc. attempted to stop Musk from expanding his stake one day after launching a US$43 billion unsolicited takeover bid for the entity.
Last Friday, Twitter Inc implemented a “poison pill” strategy, making it impossible for Musk to expand his shareholding over 15%. Martin Lipton, a renowned corporate lawyer, coined the term “poison pill” in 1982.
In legal terms, poison pills, or shareholder-rights plans, prevent shareholders from increasing their stakes beyond a set point by granting others an option to purchase more shares at a reduced price.
Furthermore, firms that receive hostile takeover bids frequently employ the “poison pill” method to ward off an unwelcome bidder or gain time to weigh their alternatives.
Conclusion
On Twitter’s bid, the battle has begun. We’ll have to wait a little longer to see who gets the ball in their court.
Good read: Elon Musk Becomes Twitter’s (TWTR) Biggest Shareholder After 9.25% Stake
