Whether Twitter will decide to explore a sale will likely hinge on whether it receives attractive and credible offers in the coming days. "If they think Musk will turn Twitter into a free-speech hellscape, that is sufficient justification," Quinn said. The directors can refuse to engage with Musk if they believe the company's content policies and culture better serve the long-term interests of its investors, said Brian Quinn, a professor at Boston College Law School. Twitter and Musk spokespeople did not immediately respond to requests for comment.Īs it stands, board directors legally have wide discretion on how to handle Musk's bid because it was unsolicited. "All these culture and discourse and democracy considerations fall by wayside because that’s not going to benefit shareholders anymore," said Ann Lipton, a professor at Tulane Law School. Board directors are not allowed to factor in what would happen to the company in their deliberations if existing shareholders will cash out. This would change, however, if, Twitter's board decided to explore a sale, either because it received more offers or it decided to solicit acquisition bids, these experts said.Ĭorporate law in Delaware, where Twitter is incorporated, dictates that once a company launches a sale process, securing the most lucrative deal for shareholders becomes the overarching consideration. Even if Twitter's bankers declared the offer was fair, the company's board directors have wide latitude to reject it if they thought the platform was better off with its current content strategy, corporate governance lawyers and professors said. Twitter's board is expected to reject Musk's bid as too low by April 28, when it is scheduled to report first-quarter earnings, people familiar with the matter have said. ![]() Musk, the world's richest person and CEO of Tesla Inc (TSLA.O), has said he wants to make Twitter an "arena for free speech," cheering Twitter's critics who complain about censorship and alarming those worried about hate speech and bullying. The San Francisco-based company received a $43 billion "best and final" offer from Musk last week, which it is still reviewing. April 19 (Reuters) - Twitter Inc's (TWTR.N) board directors can lean on concerns about the fate of the social media platform under Elon Musk to rebuff him, but if they decide to explore a sale, price will override all other considerations, corporate governance experts said.
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