Apollo Global Management Inc is interested in helping finance a bid for Twitter Inc following Elon Musk’s US$43 billion unsolicited offer to take the company private, people familiar with the matter said.
Apollo is considering backing a potential deal for Twitter and could provide Musk or another bidder, such as private-equity firm Thoma Bravo LP, with equity or debt to support an offer, the people said, declining to be named because the discussions are private.
The participation could come in the form of credit or preferred equity, one of the people said.
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POISON PILL
Twitter shares posted their biggest gain in two weeks on Monday after the social media company launched a poison pill defense to thwart the Tesla Inc chief executive’s bid to take the company private at US$54.20 a share.
A securities filing on Monday confirmed the defense strategy Twitter outlined last week, which would allow the company to issue new stock that all shareholders except Musk could buy at a discounted price.
It imposes a “significant penalty” on any person or entity that would acquire more than 15 percent of the company without board approval, the filing said.
Musk owns just over 9 percent of Twitter shares.
“The board adopted the rights agreement to protect stockholders from coercive or otherwise unfair takeover tactics,” the filing said.
The stock rose 7.5 percent to US$48.45 in New York, its biggest jump since April 4.
Twitter has been fielding takeover interest from other parties, including technology-focused private equity firm Thoma Bravo, a person familiar with the matter said.
Private equity firm Silver Lake, which already owns a significant stake in Twitter, would also make sense as a partner as it has an existing relationship with Musk, but it is unclear if it is interested.
ORACLE
Meanwhile, Musk might partner with Oracle Corp and a private equity consortium that includes Thoma Bravo to thwart Twitter’s poison pill, “while raising the bid 10 to 15 percent to about US$50 billion,” Bloomberg Intelligence analysts said.
Musk, for his part, has said that any rejection of his bid would cause him to re-evaluate his stake. Over the weekend, Musk said that the economic interests of Twitter’s board are not aligned with shareholders.
He was responding to a tweet about board members’ stock holdings, saying that with the impending departure of cofounder Jack Dorsey, the board “collectively owns almost no shares.”
In a Twitter post on Monday, Musk said that if his Twitter bid succeeds, board members would not be given a salary.
Tesla has paid its own directors an annual cash retainer of about US$20,000 plus certain additional fees in recent years, but they also each receive stock option grants every few years — meaning they stand to make tens of millions of dollars or more with Tesla’s stock price gains.
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