Don’t expect another bidder to emerge for Twitter , which agreed to sell itself to Elon Musk in a deal valued at about $44 billion.
On Monday, Twitter (ticker: TWTR) accepted Musk’s $54.20-a-share offer for the social-media platform. The deal includes $21 billion in equity, as well as $25.5 billion of fully committed debt and margin loan financing, a statement said. It is expected to close later in 2022.
Twitter’s stock was down Tuesday by more than 3%, trading at $49.97.
Twitter searched all around the globe for a second bidder but failed to discover one, said Dan Ives, a senior equity research analyst at Wedbush Securities. “We believe if a second bidder, white knight were to come in, the board would’ve found him. They came up empty-handed which is why they had to sign, pen to paper, with Musk,” Ives said.
Twitter declined to comment to Barron’s.
Musk is also paying a good price for Twitter, though some stockholders were said to be holding out for $60 a share. “Twitter shareholders are popping the Champagne, or drinking whiskey, because they’re happy they got this price. There’s a better chance of me playing in the NBA playoffs than them getting $60 a share,” Ives quipped.
It’s very unlikely another bidder can match Musk’s offer, said Matthew Epstein, managing partner and founder of Newbold Partners, a fintech-focused boutique investment bank. The billionaire is supplying the $21 billion of equity. He’s also taking out a risky $12.5 billion margin loan that was secured using Tesla stock (TSLA), according to Securities and Exchange Commission filings. (Several banks have committed to provide $13 billion in loans.) “Few others have that type of capital available to them,” Epstein said.
Twitter declined to comment to Barron’s.
Musk is also paying a good price for Twitter, though some stockholders were said to be holding out for $60 a share. “Twitter shareholders are popping the Champagne, or drinking whiskey, because they’re happy they got this price. There’s a better chance of me playing in the NBA playoffs than them getting $60 a share,” Ives quipped.
It’s very unlikely another bidder can match Musk’s offer, said Matthew Epstein, managing partner and founder of Newbold Partners, a fintech-focused boutique investment bank. The billionaire is supplying the $21 billion of equity. He’s also taking out a risky $12.5 billion margin loan that was secured using Tesla stock (TSLA), according to Securities and Exchange Commission filings. (Several banks have committed to provide $13 billion in loans.) “Few others have that type of capital available to them,” Epstein said.