$43 billion to take over Twitter: Does Elon Musk have sea urchins in his pockets? – La Tribune.fr

On April 14, Elon Musk launched the latest offensive in his blitzkrieg attack on Twitter: a hostile takeover bid, at $54.20 a share, or nearly $43.4 billion for the company. entire shares. The South African billionaire prides himself on offering a premium of 38% compared to the share price in early April, when he became the largest shareholder by acquiring 9.2% of the shares. And he warned: this offer which he considers generous is non-negotiable. Unless it’s just a tactic… Now, the ball is in the court of the other shareholders of the social network, free to accept or refuse this offer. For its part, Twitter management said its board of directors will “carefully review the offer to determine the course of action that it believes is in the best interests of the company and all Twitter shareholders. “. But according to The Information, she would lean towards an unfavorable opinion. Beyond the financial aspect, Elon Musk did not give details of his takeover project, except that he wanted to take the company out of the stock market. In his statement to the SEC (the American financial policeman), he is content to write that the social network with more than 330 million monthly users has “extraordinary potential”, which he intends to “unlock”. Takeover on Twitter: “The fact that Elon Musk can obtain such power is worrying” “The offer is far too low” As soon as the offer was put on the table, the first shareholders publicly announced their refusal to come , starting with the Saudi prince and investor Al-Walid ben Talal. “I don’t think Elon Musk’s proposal ($54.20) comes anywhere close to Twitter’s intrinsic value, given its growth prospects. I’m one of the largest shareholders and the oldest of Twitter. Kingdom Holding Company (his investment fund, editor’s note) and myself reject this offer”, he wrote on his Twitter account. The Saudi was joined in his remarks by investor Ross Gerber, who owns more than 9,000 shares through his fund. “The offer is way too low. Elon needs to come up with an offer of $69 a share to win Twitter.” Despite these refusals from the outset, several experts believe that Elon Musk will eventually succeed. In a note consulted by AFP, analysts at Wedbush Securities predict that the “twist drama will end with the acquisition of Twitter by Mr. Musk”. Asked by La Tribune, Jean-Christophe Liaubet, financial analyst and partner at Fabernovel, believes that the offer is “correct”. “With this offer, the level of pressure on shareholders is quite high. The peak at over $70 a share was a long time ago [14 mois, ndlr], and it should be remembered that in February, the action was at 34 dollars”. The tech specialist also recalls that the stock market situation of the social network is rather advantageous compared to its economic performance. “Twitter is today already valued at more than 7 times its 2021 turnover. For Pinterest or Meta, this coefficient is only 4”. Twitter, a value apart To understand this debate on the fair price of Twitter, we must take into account specificities of the company. “Twitter has always had a complicated history on the stock market. It is a unique company, apart, even among social networks, which has never made a profit”, reminds La Tribune Jacques-Aurélien Marcireau, co-director of equity management at Edmond de Rothschild Asset Management. term of growth in the number of users, Twitter remains very far from Facebook and even from Snapchat. Moreover, its profitability remains to be demonstrated, and the evolution of its governance has been complicated. In short, being an investor in Twitter is a way of the cross. But it is a unique asset, known to all.” Due to the special place of the social network in society, the analyst considers that the bonus offered by Musk has “nothing pharaonic” and thinks that it will not be enough. not to convince investors.” Moreover, we observe that when the offer was made public the stock was down [en repli de -1,68% à la clôture de Wall Street, ndlr]. This means that people do not believe in the offer, or at least they do not believe that all the shareholders will give in”, he argues. A “white knight” in the second curtain? Whatever the outcome of the takeover, the current management committee of Twitter will find itself weakened. The billionaire declared that his offer was final, and that he would review his place as a shareholder of the company if his maneuver failed. “Elon Musk therefore threatens to sell its 9.2% share, which would cause the title to fall”, points out Jacques-Aurélien Marcireau. At this time, another buyer could take on the role of “white knight”, and propose a more attractive counter-offer. ” But there are not many logical buyers: you need a big tech player, imposing but not enough to trigger the antitrust”, notes the analyst. In other words, the takeover of Twitter is unthinkable for Gafam (Google, Apple , Facebook, Amazon, Microsoft) but it can be considered by actors second-line, like the champion of customer management software Salesforce, who had already tried his luck in 2019. But this white knight still has to find an economic interest in it, which today is debatable. For billionaire investor Mark Cuban, this outcome would in any case be inevitable sooner or later. “Without a dominant shareholder on the board, and without major shareholder activists, if the company doesn’t grow quickly, Twitter’s days as an independent business are likely numbered,” he diagnoses in Bloomberg. The regulator, guest of the continuation of the soap opera Twitter / Musk? Another player could invite himself into this soap opera: the Securities and Exchange Commission (SEC), the American financial policeman. Earlier this week, Twitter shareholders have already seized it against Musk for failing to fulfill its obligations when it entered the capital. But the authority has enough to open an important file against Elon Musk. “On the stock market, when you exceed the threshold of 5% of the shares, you are forced to declare your intentions. Either you present yourself as a passive shareholder, who will simply vote and receive dividends, or as an active shareholder, brought to sit, or even to carry out a hostile takeover”, develops Jacques-Aurélien Marcireau. Before exclaiming: “not only did Elon Musk take a long time to come forward to the regulator, but when he finally did, he presented himself as a passive investor! He shows total contempt for the regulator The SEC cannot sit idly by or it will set a dangerous precedent.” In other words, the series Elon Musk vs Twitter is likely to keep us in suspense for a good while yet… François Manens 15 Apr 2022, 18:40