Potential Acquirers of Twitter Scatter

A few weeks ago, Twitter seemed to be the belle of the ball, as numerous companies reportedly hired investment banks to look at the possibility of a takeover of the social media company.

The list of potential acquirers was serious - Google, Disney, Apple and Salesforce were all reportedly kicking the tires on a potential purchase. Shares of Twitter zoomed higher as a result, nearly doubling from levels seen earlier this year.

The problem for Twitter and its shareholders all along was this - if the company wasn't able to close on a deal, they would be left to continuing operating as an independent entity. Given the company's struggles to effectively monetize and grow its stagnating user base, this was not an attractive prospect.

This created a situation where the risk/reward, at least in the eyes of some analysts, was unfavorable. As Twitter soared past the $24 level, many analysts wondered just how much of a premium there would be on any potential purchase price, especially given how much the stock had run up over the past few months. If a deal couldn't be concluded, they warned, shares of Twitter would tank very hard.

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This is the scenario that shareholders of Twitter are now facing on Monday after Bloomberg.com reported that Twitter's potential acquirers have likely all decided against a deal.

This even includes Salesforce.com, which had been thought to be the leading contender to close a Twitter deal. According to Bloomberg, some Salesforce investors approached management at a recent investor conference and tried to dissuade the company from moving forward with a purchase. The market clearly didn't like the idea of a Salesforce/Twitter deal, as every time that Salesforce was mentioned as a potential acquirer of Twitter, their stock dropped.

Last week, Google, Disney and Apple all reportedly pulled out of the Twitter "sweepstakes". This left Salesforce as likely the company's last chance, and Salesforce has reportedly decided against a deal at this time.

According to Bloomberg, Twitter cancelled a board meeting on Friday in which company executives were scheduled to meet with outside advisers who were advising Twitter on a sale.

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Barring some sort of a late breaking development, Monday should be a pretty dismal day for Twitter.

Source: Bloomberg.com - Twitter Seeks New Path After Potential Bidders Said To Back Off

Filed under: General Knowledge