Elon Musk’s Hostile Takeover: Here’s How it Will Happen

Uncategorized

In just one-week’s time, Elon Musk has positioned himself to potentially stage a hostile takeover of one of the world’s preeminent social media platforms, Twitter.

If the self-made billionaire and Telsa CEO is to make a move, that move will be made within days, Aron Solomon told The Western Journal.

Solomon, the chief legal analyst for Esquire Digital, walked The Western Journal through Musk’s Twitter “endgame,” which he believes is to acquire a controlling interest.

Speculation regarding Musk’s potential hostile takeover has run rampant thanks to the billionaire’s busy week of business moves.

On April 4, Musk was announced as Twitter’s largest shareholder after it became public knowledge that he had purchased 9.2 percent of the company for a reported $2.9 billion. The next day, it was announced that he would be joining the company’s board of directors.

Musk was then offered a position with the company’s board of directors on the condition that he not own more than 14.9 percent of the company’s outstanding stock.

After turning the offer down on Sunday, Musk issued an updated SEC filing on Monday, officially reserving his right to buy more shares of Twitter in the future should he so choose, The Verge reported.

Buying 51 Percent of Shares

“He’s doing one of two things,” Solomon told The Western Journal. “He’s either using the Twitter platform to get a lot of attention for himself … but more than likely, he sees this as a way to have control of a well-established social media brand.”

There are two ways Musk can go about a hostile takeover of the company — reaching out to individual shareholders and offering them a premium on their shares or issuing a tender offer. Either way, Musk needs to focus on finding a “win-win” with shareholders, Solomon said.

According to Investopedia, a “tender offer” invites “shareholders to sell their shares for a specified price and within a particular window of time. The price offered is usually at a premium to the market price and is often contingent upon a minimum or a maximum number of shares sold.”

If such a tender offer were to be made, Solomon said, shareholders would only receive the high premium if Musk were to receive a certain amount of shares, presumably over 50 percent.

Musk Needs to Move Fast

If Musk’s plan is indeed to take…

Source

Leave a Reply

Your email address will not be published. Required fields are marked *