Thoma Bravo, a technology-focused private equity firm that had more than $103 billion in assets under management, is planning a bid for Twitter challenging Elon Musk’s $43 billion offer for the social media company.
It is not clear how much Thoma Bravo would be prepared to offer and there is no certainty that such a rival bid will materialize, Reuters news report said.
Elon Musk owns more than 9 percent of Twitter, making him the largest shareholder after mutual fund giant Vanguard.
Twitter said on Friday it adopted a poison pill that would dilute anyone amassing a stake in the company of more than 15 percent by selling more shares to other shareholders at a discount. Known formally as a shareholder rights plan, the poison pill will be in place for 364 days.
The move would not bar Elon Musk from taking his offer directly to Twitter shareholders by launching a tender offer. While the poison pill would prevent most Twitter shareholders from selling their shares, the tender offer would allow them to register their support or disapproval of Musk’s offer.
“It is a predictable defensive measure for the board to go down that will not be viewed positively by shareholders given the potential dilution and acquisition unfriendly move,” Wedbush analyst Dan Ives tweeted on Friday.
Silver Lake, a private equity firm with more than $90 billion in assets under management, would be a natural partner for Musk because it offered financing for his $72-billion bid for Tesla four years ago, which Musk subsequently abandoned. Silver Lake co-chief executive Egon Durban also sits on Twitter’s board.
But Durban did not recuse himself on Thursday when Twitter’s board met to discuss Elon Musk’s offer for the first time, in a sign that Silver Lake has not sought to team up with Musk or make a bid of its own thus far.
Twitter has more than $6 billion of cash on its balance sheet and its annual cash flow is close to $700 million, providing some comfort to banks considering whether should provide debt for a deal.