Posted originally on the conservative tree house on April 21, 2022 | Sundance

There is still doubt if Elon Musk really does want to purchase the Twitter social media platform.  However, Musk himself seems to be putting a lot of his own credibility on the line as he announces the construct of his $46 billion purchase proposal.

It looks like Musk has created a second alternative to the purchase if the Twitter board of directors refuses the original offer.  Within the secondary construct, a tender offer, Musk would be able to bypass the board and go directly to shareholders.

(YAHOO) – Elon Musk has secured commitments for $46.5bn (£35.5bn) that would allow him to bypass Twitter’s (TWTR) board and go directly to the social media company’s shareholders with his takeover bid.

Musk said he would personally provide $21bn of equity for the deal with another $12.5bn coming from margin loans, according to paperwork filed with the Securities and Exchange Commission on Thursday.

Banks, including Morgan Stanley, have agreed to provide another $13bn in debt secured against Twitter itself, according to the filing.

Musk has not yet determined if he will make a tender offer for Twitter or whether he will take other steps to further the proposal, the filing states.

Tender offers involve making a bid to purchase some or all shares of a company directly from its shareholders. (read more)

There are two ways to buy a publicly traded company. The simplest and most common is a board-approved merger. Talks start in secret, the two sides haggle and then arrive at a deal. Shareholders get to vote, and it is an all-or-nothing affair. Typically with a simple majority, the buyer walks away with the entire company. If the vote fails, the buyer goes away empty-handed.

A tender offer instead makes a direct appeal to shareholders to sell—or tender—their shares at a specific price. It can be used in friendly deals, but its real value is to hostile bidders when the target company’s board won’t engage. Tender offers simply go around them.

And they aren’t all or nothing. A buyer can bid for, say, just enough shares to cross 50%, thus seizing control. From there it could replace intransigent board members with friendlier ones, though in practice, it rarely gets that far. If a tender offer looks likely to succeed, reluctant boards tend to capitulate and negotiate a deal.

Mr. Musk would, with some regulatory paperwork, announce the offer at a specific price. The offer has to remain on the table for at least 20 days.

Those documents would lay out the number of shares he is soliciting. If Mr. Musk, who owns more than 9% of Twitter, takes a bare-bones approach, he would seek another 41% or so.

Meanwhile, Twitter would have 10 days to make its own recommendation to shareholders regarding the tender offer—in this case, presumably that it doesn’t accept it.

If not enough shares are tendered, Mr. Musk could cancel the offer or amend the terms.

The New York Post has details on the ideological opposition:

[…] “After backing out of an agreement to take a seat on the board, Musk is threatening to cut board salaries to zero, a move he says will save the company nearly $3 million a year. Each non-employee board member earned $225,000 in stock in 2021, according to Twitter’s public filings. Directors, with the exception of Dorsey and his co-founder, CEO Parang Agrawal, also received $12,500 in cash, plus extra fees, ranging from $2,500 to $7,500, for serving on various board committees.

So who are these Twitter board members fighting Musk’s hostile bid? Twitter — which has come under fire for censorship, in part for banning the New York Post’s coverage of Hunter Biden’s laptop — is filled with a motley mix of tech vets, retail gurus, academics, philanthropists and former government officials.” (read more)

Do you remember that weird dynamic when President Trump was dealing with North Korea and Kim Jong-un while at the same time having to pretend publicly that Beijing (Chairman Xi Jinping) wasn’t in control of Chairman Kim?   There are some similarities here with Elon Musk.

Musk likely has some of the best tech people in the world working for him and advising him.  He has to know that Twitter is only operationally viable insofar as the twitter simultaneous user processing systems remain on the backbone of U.S. government big data architecture.  Twitter most definitely is not financially stable as a business without govt data-processing subsidy; it’s just too costly and the Twitter service is free for most users.

If you accept that Musk is well aware of the cost issue, then he has to have some plan to deal with it – via at least a vision down the road where Twitter is financially viable – or, he’s going to end up needing the same data processing subsidy from the govt, which would inevitably maintain the same ideological underpinning he is trying to remove.

Assuming Musk is legit in his motives, his only leverage in this game of pretend and conquest, is knowing both the provider (govt) and recipient of the subsidy (Jack) do not want the full scope of the public-private partnership exposed.

I have no idea how this is going to end, but we can all see the Deep State is going bananas.