Twitter shares jumped more than 4% in the premarket on reports the company is nearing a deal with Elon Musk that could be announced as soon as Monday.
Musk earlier this month offered to buy Twitter for $54.20 a share, or about $43 billion. The social media company had been expected to decline a deal and had adopted a so-called “poison pill” to fend off a potential hostile takeover. However, Twitter became more receptive to a bid after Musk revealed he secured $46.5 billion in financing.
Twitter’s board met Sunday to discuss Musk’s financing plan for his proposed bid, a source close to the situation told CNBC.
Bloomberg and Reuters reported the two sides could reach an agreement as soon as Monday. The board negotiated with Musk into the early hours of Monday, according to The New York Times.
It’s unclear what a final deal could look like, and Reuters reported Monday that an agreement could still fall apart. Twitter has not been able to secure a “go-shop” agreement yet, which would allow it to look for other bids once it signs an agreement, according to Reuters. The company could still accept another bid if Musk pays a break-up fee, it added.
Wall Street was likely to view the news of Twitter’s openness to a bid “as the beginning of the end for Twitter as a public company with Musk likely now on a path to acquire the company unless a second bidder comes into the mix,” Wedbush analyst Dan Ives said in a Sunday note.
Twitter declined to comment. Tesla shares were down about 2% in the premarket.
The Tesla and SpaceX CEO has been on a tear to acquire the social media company. He had built up more than 9% in stock and turned down an offer to join the board before putting in a bid for the company.
Musk, an avid Twitter user, has argued it needs to be “transformed” into a private company so it can become a forum for free speech. He’s also said Twitter’s board members’ interests “are simply not aligned with shareholders” and that the board “owns almost no shares” of the company.