Twitter's board of directors has undergone an unexpected restructuring as fears over the viability of Elon Musk's buyout deal rise.
On Wednesday, a large percentage of Twitter shareholders voted to remove Silver Lake co-CEO Egon Durban from the board of directors for a second term, after concerns expressed by two investor organizations that Durban serves on the boards of too many public firms. Following the vote, Durban tendered his resignation; however, the other board members refused to accept it on Friday, instead of agreeing to have Durban resign from two additional board positions over the following year. Durban's resignation was accepted.
As stated in the filing, "Mr. Durban has increased the board's capacity to monitor the Company's long-term value development plan." Thus, the directors find that "accepting Mr. Durban's proffered resignation at this time is not in the best interests of the firm," as a consequence of their investigation.
Connections With Musk
Given Elon Musk's recent acquisition of Twitter, this spat is particularly noteworthy. He has worked with Tesla CEO Elon Musk on a number of important equity ventures, including the failed attempt to take the company private in 2018, as co-CEO of private equity firm Silver Lake. When it comes to supporting Elon Musk's planned takeover of Tesla, he is considered one of his closest supporters on the board and has a critical role.
Musk’s Twitter Versus Tesla Takeover
For the sake of his payments and cryptocurrency firm, Block, former Twitter CEO Jack Dorsey has resigned from Twitter's board of directors.
On April 25th, Musk signed a deal to acquire all of Twitter's outstanding shares at a price of $54.20 — but in recent weeks, he has sent conflicting signals about whether he intends to fulfill this commitment, increasing the pressure on Twitter's board of directors to act. Elon Musk put a halt on a proposed takeover of Tesla on May 13th, saying the probe into bot activity was "on pause."
It has been suggested that Musk is trying to negotiate a cheaper price for the buyout, which he has said is "not out of the question." The arrangement is not up to discussion, according to Twitter's leadership. Twitter's board of directors, tasked with shareholder protection, will undoubtedly play a key role in executing the deal.
Earlier this week, a lawsuit on behalf of Twitter shareholders was launched to address the same issues, stating that Musk had made false and misleading comments that decreased the value of Twitter's shares. Twitter's stock is still trading at a discount to the acquisition price, indicating a general lack of faith in the deal's ability to go through as planned.
Featured image: Twitter
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