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Elon Musk Isn’t Going Away if Twitter Rejects Him. Here’s What He Might Pay.

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Elon Musk

Scott Olson/Getty Images

Even if the


Twitter

board rejects


Tesla

CEO Elon Musk’s offer to buy the social media platform, he won’t go away immediately. There is more drama to come. Elvis Presley has something to do with it.

Musk tweeted out a lyric from the Presley hit Love Me Tender on Saturday. That isn’t much of a tell, but following the Tesla (ticker: TSLA) CEO requires a masters’ degree in Twitter-ology.

That training would lead long-time Musk followers to the conclusion that the tweet isn’t innocent. And many of the 30,000-plus comments received as of Monday morning refer to Musk’s potential takeover of Twitter (TWTR). There are also comments asking for a car as well as bots pushing cryptocurrencies.

Musk didn’t reply to a Barron’s question attached to the original tweet.

Musk, in his communication to the Twitter board, indicated that $54.20 a share was his best and final takeover offer and if the board didn’t accept it that Musk was likely to sell his stock.

“If the deal doesn’t work, given that I don’t have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder,” read part of his his April 13 correspondence.

Those statements look like more of a negotiating tactic in light of the Saturday tweet. A tender offer is the next level in a hostile bid for a company. It bypasses a board of directors and appeals directly to shareholders to tender or sell their stock to the bidder at a set price.

The trick with this tender is that Twitter adopted a shareholder rights plan, more commonly known as a poison pill, on Friday, the day before Musk’s “tender” tweet. Rights plans are designed to thwart hostile bids by giving everyone but the hostile bidder the right to buy stock. It makes acquiring a company more expensive for the bidder.

“A triggering event, for poison pill purposes, is either a tender offer for, or an actual acquisition of, the requisite percentage of the corporation’s stock,” accounting expert and long-time Wall Street analyst Robert Willens explained to Barron’s. “A tender offer stands on the same footing as an actual acquisition when it comes to rights plans.” 

So going with a tender would be a bold move for Musk, given the rights plan. It could make the acquisition more costly.

The tweet doesn’t mean a tender offer is coming. Musk could just decide to raise his bid and take the new price to the board for review.

The Musk-Twitter drama has been moving faster than the time it takes to tweet a meme. And Twitter shareholders are learning that when Musk is involved anything is possible.

Twitter stock was up 3.2% in premarket trading Monday.

S&P 500
and

Dow Jones Industrial Average
futures were 0.3% and 0.1%, respectively.

Write to Al Root at allen.root@dowjones.com

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