The official profile of Elon Musk on the social network Twitter. The billionaire Elon Musk bought 9% of Twitter, an investment of USD 3 billion.
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Twitter shares jumped more than 5% in the premarket on reports the company is nearing a deal with Elon Musk that could be announced as soon as Monday.
Musk earlier this month offered to buy Twitter for $54.20 a share, or about $43 billion. The social media company had been expected to decline a deal and had adopted a so-called “poison pill” to fend off a potential hostile takeover. However, Twitter became more receptive to a bid after Musk revealed he secured $46.5 billion in financing.
Twitter’s board met Sunday to discuss Musk’s financing plan for his proposed bid, a source close to the situation told CNBC.
It’s unclear what a final deal could look like, and Reuters reported Monday that an agreement could still fall apart. Twitter has not been able to secure a “go-shop” agreement yet, which would allow it to look for other bids once it signs an agreement, according to Reuters. The company could still accept another bid if Musk pays a break-up fee, it added.
Wall Street was likely to view the news of Twitter’s openness to a bid “as the beginning of the end for Twitter as a public company with Musk likely now on a path to acquire the company unless a second bidder comes into the mix,” Wedbush analyst Dan Ives said in a Sunday note.
Twitter declined to comment. Tesla shares were down about 3% in the premarket.
The Tesla and SpaceX CEO has been on a tear to acquire the social media company. He had built up more than 9% in stock and turned down an offer to join the board before putting in a bid for the company.
Musk, an avid Twitter user, has argued it needs to be “transformed” into a private company so it can become a forum for free speech. He’s also said Twitter’s board members’ interests “are simply not aligned with shareholders” and that the board “owns almost no shares” of the company.