Private equity firm Thoma Bravo considering Twitter bid to thwart Musk

Elon could have competition: Private equity firm Thoma Bravo is considering a Twitter bid to thwart Musk’s plan to buy social media giant as Vanguard scoops up largest stake in firm

  • Private equity giant Thoma Bravo is considering a bid for Twitter
  • The bid could be a worthy rival to Elon Musk’s offer for the social media 
  • It’s not clear when Thoma Bravo might present its rival bid 
  • Thoma Bravo already owns other tech names McAffee, Landesk and Barracuda and manages more than $103 billion in assets 
  • Elon Musk is no longer the largest shareholder in Twitter after asset managers Vanguard Group upped their stake in the Silicon Valley company 
  • Vanguard now owns 10.3 percent of Twitter, while Musk owns 9.1 percent of the company – meaning he is still the largest individual shareholder
  • Last week he turned down an offer to join the board 
  • Vanguard’s controlling stake means that Musk’s proposal to takeover the company is now considered less likely 

Private equity firm Thoma Bravo is contemplating a bid for Twitter to rival that of Elon Musk’s offer for the social media giant.

Thoma Bravo, which already owns other tech names McAffee, Landesk and Barracuda manages more than $103 billion in assets, has a team set aside working on the possibility of acquiring the platform.

‘They are making a push,’ a source told the New York Post. 

Currently, it is not know what Thoma Bravo’s bid might be or when it will let the Twitter board know of its interest. 

Private equity firm Thoma Bravo is contemplating a bid for Twitter to rival that of Elon Musk’s offer for the social media giant 

A source told the Post that should a bid be made by the company it might be seen as a ‘white knight’. 

Tesla chief Musk launched a hostile takeover effort for Twitter on Thursday, insisting the platform needs to be transformed but acknowledging his $43 billion bid may fail.

The world’s richest person offered $54.20 a share, which values the social media firm at some $43 billion, in a filing with the Securities and Exchange Commission made public on Thursday.

Twitter’s board met on Thursday afternoon, and the company’s CEO Parag Agrawal, 37, pictured, spoke to staff afterwards

Musk told a conference in Canada that he was ‘not sure’ he would succeed and acknowledged a ‘plan B’ but refused to elaborate, though in the filing he noted a rejection would make him consider selling his shares.

Twitter’s board met on Thursday afternoon, and the company’s CEO Parag Agrawal afterwards spoke to staff. 

He told employees that the company was still evaluating Musk’s $43 billion offer, according to The Verge. Ahead of Agrawal’s speech, employees were played songs including ‘I Say A Little Prayer’ and ‘I Want It That Way’ by the Backstreet Boys, the site reported. 

The 37-year-old Agrawal then held a 25-minute Q&A session. He did not say when the board would have an answer for Musk, or which way the board was leaning – responses which The Verge said frustrated some staff. 

The board would follow a ‘rigorous process’ and make a decision ‘in the best interest of our shareholders,’ he said.  

Thoma Bravo sees potential for the company should it purchase Twitter when it comes to controlling costs and widening profit margins. Orlando Bravo, co-founder of Thoma Bravo is pictured

Musk last week disclosed a purchase of 73.5 million shares — or 9.2 percent — of Twitter’s common stock, an announcement that sent its shares soaring more than 25 percent.   

On Thursday, asset manager Vanguard Group increased its stake to overtake him as the largest shareholder.

Vanguard now owns 10.3 percent of Twitter, while Musk owns 9.1 percent of the company, making him the largest individual shareholder. 

Vanguard, led by CEO Tim Buckley, increased its stake in the company at some point during the first quarter, according to SEC filings made on April 8.  

Vanguard previously reported owning 67.2 million shares of Twitter or about 8.4 percent of the company as of the end of December, according to FactSet.

Vanguard CEO and chairman Tim Buckley. His company has increased its stake in Twitter from 8.4 percent to 10.3 percent, meaning that Vanguard now owns more shares than Elon Musk

Other owners of large quantities of Twitter stock include Morgan Stanley, Fidelity and Black Rock. 

Twitter’s board said it would carefully review what it termed Musk’s ‘unsolicited, non-binding’ offer and decide on a course of action that was ‘in the best interest of the company and all Twitter stockholders.’

Musk said he ‘could technically afford’ the buyout while offering no information on financing, though he would likely need to borrow money or part with some of his mountain of Tesla or SpaceX shares.

Despite saying he wanted to take the company private, he said the firm would keep up to 2,000 investors — the maximum allowed. 

‘I would need to reconsider my position as shareholder,’ Musk said. Later on Thursday he said he wasn’t sure if he’d be able to acquire Twitter. 

Twitter’s shares had a volatile day of trading on Thursday, closing down at $45.08 amid concern about Musk’s intentions

Should Twitter reject Musk’s deal, the share price could collapse which is when a ‘white knight’ bid would be useful.

Musk on Thursday afternoon tweeted a poll, asking: ‘Taking Twitter private at $54.20 should be up to shareholders, not the board.’

Over 80 percent of the one million votes cast in the first hour said yes.

Musk then tweeted: ‘I love you.’ 

Thoma Bravo will need to show that it has its affairs in order and an alternative, ‘friendlier’ bid worked out. 

‘Our private equity investment vehicles employ the same investment philosophy — to partner with and support existing management teams to help deliver solid operating results and drive innovation,’ Thoma Bravo states on its website.

The firm normally invests in business-to-business software companies rather that deal with companies than deal directly with consumers. 

A source explained how last month Thoma Bravo last month made a $10.7 billion buyout agreement to acquire listed Anaplan, a company that makes software modeling for different business outcomes. 

Thoma Bravo sees potential for the company should it purchase Twitter when it comes to controlling costs and widening profit margins.

Twitter generates significant cash flow and is not a bad candidate for a buyout a source explained.

Musk’s move throws another curve into a roller-coaster ride for his volatile relationship with the global social media service, and raises many questions about what comes next.

Musk would need to purchase roughly 400.32 million additional shares, valued around $15.3billion, to own 50 percent of Twitter

He was offered a seat on the board but turned it down over the weekend.

Musk went on to use Twitter as a stage to ask whether the social media network was ‘dying’ and to call out users such as singer Justin Bieber, who are highly followed but rarely post.

‘Most of these ‘top’ accounts tweet rarely and post very little content,’ the Tesla boss wrote, captioning a list of the 10 profiles with the most followers — which includes himself at number eight, with over 81 million followers.

In other weekend tweets, Musk joked about dropping the ‘w’ from Twitter’s name and about converting its San Francisco headquarters to a homeless shelter ‘since no one shows up anyway.’

He also suggested removing ads, Twitter’s main source of revenue.

Musk has mused on Twitter about giving verified account checkmarks to everyone paying for premium subscription accounts, which cost $3 monthly.

‘I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,’ Musk said in his filing.

Musk breaks the mold as a business figure, even in the Silicon Valley world known for disrupting markets and changing lifestyles.

The serial entrepreneur’s endeavors include driving a shift to electric vehicles with Tesla, private space exploration, and linking computers with brains.

His behavior, however, has raised eyebrows, prompted laughs, and sometimes drawn condemnation or even litigation.

‘It’s get out the popcorn time as we expect many twists and turns in the weeks ahead as Twitter and Musk walk down this marriage path,’ Wedbush analysts said in a note to investors.

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