Will They Join Hands with Musk? "Apollo Considering Participation in Twitter Acquisition Bid" (Summary)

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Elon Musk, CEO of Tesla, is reportedly considering the participation of Apollo Global Management, a US private equity firm and one of the world's largest mergers and acquisitions (M&A) specialists, in the bidding for Twitter, according to the Wall Street Journal (WSJ) and others on the 18th (local time).

WSJ cited sources saying that Apollo has discussed supporting the acquisition of Twitter and could provide shares or funding to Musk or other potential bidders, such as the US private equity firm Thoma Bravo, which is also considering entering the bidding. Thoma Bravo is known to have recently contacted Twitter's management to discuss acting as a "white knight" (a friendly acquirer favored by the target company's management).

CNBC reported that Apollo is not interested in directly joining a private equity consortium to acquire Twitter but is considering providing funding in the form of preferred shares. WSJ also reported that Apollo, which acquired Yahoo last year, internally explored the possibility of collaboration between Twitter and Yahoo if it were to acquire Twitter, but it is uncertain whether Twitter would accept this.

The New York Times (NYT) stated, "Musk has not specifically disclosed how he will raise funds given that most of his assets are tied up in stock," adding, "Investors have been skeptical about securing acquisition funds because he would need to borrow $15 billion to $20 billion (approximately 18.5 trillion to 24.7 trillion KRW) from somewhere."

"Board Interests Do Not Align with Shareholders" Musk's Continued Criticism

The report on Apollo's possible participation came amid a dispute between Musk and Twitter's board. Musk announced on the 14th that he would acquire 100% of Twitter's shares for $43 billion, and the next day, Twitter's board countered by implementing a "poison pill" to block the takeover.

Elon Musk, CEO of Tesla [Photo by Reuters]

In response, Musk has continued to target and criticize the board. On that day, he tweeted, "If the acquisition succeeds, Twitter board members' salaries will be $0," claiming, "This will save $3 million annually right there." According to the US Securities and Exchange Commission (SEC) filings, Twitter currently pays its board members approximately $2.9 million annually in cash and stock compensation.

The day before, Musk also claimed, "Since founder Jack Dorsey left the company, the board as a whole owns very little stock in the company," and "Objectively, the board's economic interests do not align with those of the shareholders."

Meanwhile, US media reported that Twitter is expected to reject Musk's acquisition proposal within the next few days. Twitter is likely to announce its specific stance on the acquisition proposal when it releases its first-quarter earnings on the 28th. Twitter's stock closed at $48.45 on the New York Stock Exchange that day, up 7.5%, marking the largest gain since April 4.

Founder Jack Dorsey’s Unusual Criticism of the Board

What was founder Jack Dorsey's reaction amid Twitter's hostile M&A crisis? On the 16th, in response to a Twitter user’s tweet stating, "Looking at the history of Twitter's board, it's interesting how the company was mired in conspiracies and coups, especially among the founding members," Dorsey replied, "That has consistently been the company's dysfunction."

Jack Dorsey Twitter Founder
Photo by Reuters Yonhap News

Venture capitalist Gary Tan wrote, "If the board has the wrong partners, it can literally wipe out billions of dollars in corporate value," and another Twitter user quoted a Silicon Valley proverb, "A good board doesn't make a good company, but a bad board will always kill a company." Founder Dorsey responded, "All true."

Twitter co-founder Dorsey served as CEO from the company's founding in 2007 but was fired the following year. He returned as CEO in 2015 and stepped down last November. At the time of his resignation, he stated, "Twitter was ready to move from the founder era to the next chapter, so I decided to leave the company." Dorsey is currently listed as a Twitter board member and holds a 2.25% stake, making him the largest internal shareholder. He plans to leave the board when his term expires at the shareholders' meeting next month.

This content was produced with the assistance of AI translation services.