The board of directors of Twitter unanimously recommended to shareholders that they accept Elon Musk’s $44 billion takeover bid.
Twitter’s board of directors urged shareholders to approve the buyout at Musk’s proposed price of $54.20 per share at a special meeting later this year, according to a regulatory filing released Tuesday morning.
Despite Musk’s threats to back out of the merger agreement he signed on April 25, citing concerns about fake accounts, Twitter’s board has vowed to uphold the agreement’s terms.
The date for the shareholder vote has not yet been set, but the merger agreement stipulates that the deal must be completed by October 24.
During a virtual meeting with Twitter employees last week, Musk reiterated his desire to move forward with the acquisition, despite the fact that Twitter’s stock remains far below his offering price, indicating considerable doubt that it will happen at the agreed price.
Musk listed the approval of the deal by shareholders as one of several ‘unresolved matters’ related to the Twitter deal in an interview with Bloomberg on Tuesd
The stock last reached that level on April 5, when the company offered Musk a seat on the board of directors before he offered to buy Twitter outright.
Twitter’s board of directors ‘unanimously recommends that you vote (for) the adoption of the merger agreement,’ according to a letter to shareholders filed on Tuesday.
To take effect, Musk’s offer would need to be approved by a simple majority of shareholders.
If the deal were to close right now, investors in the company would make a profit of $15.22 per share over market prices.
Despite previously stating that he believes Twitter should not serve ads, Musk told Twitter employees last week that he wants to increase the service’s user base from 229 million to at least 1 billion people, and that advertising would remain important for the company.
According to audio of the meeting obtained by Reuters, Musk said to Twitter employees, “I think advertising is very important for Twitter.”
‘I’m not opposed to advertisements. ‘Hey, let’s just make sure the ads are as entertaining as possible,’ I would probably say to the advertisers.
Musk did not provide an update on the deal closing during his first meeting with Twitter employees, which he was expected to do.
He reiterated that he was still researching bot and spam accounts on Twitter, which he described as his main concern.
Musk said there needed to be “some rationalization of headcount and expenses” in response to a question about whether he expected layoffs.
‘Right now, the costs exceed the revenue,’ he said, adding that ‘anyone who is… a significant contributor should have nothing to fear.’
ay at the Qatar Economic Forum.
Twitter’s stock was essentially flat just before the opening bell on Tuesday, and it was still a long way from Musk’s offer of $54.20 per share.
During the meeting, Twitter employees flooded an internal Slack channel with memes and complaints that Musk was not providing useful answers on his business vision and employee compensation.
They also demanded that the moderator on Slack question Musk about his views on remote work, as Twitter currently allows employees to work remotely or in the office with relative ease.
Musk stated that while he believes Twitter employees should prefer to work in an office, he is willing to make some exceptions. He believes that the bias should be “strongly toward working in person,” but that “if someone is exceptional, remote work can be okay.”
Employees at the San Francisco-based company have expressed skepticism and concern about Musk’s impending takeover, with some fearing that he will relax rules on certain content.
According to the billionaire, users should be allowed to say “pretty outrageous things” on Twitter as long as the content isn’t illegal.