Elon Musk Offers to Buy Rest of Twitter at a Valuation of More Than $43 Billion

Use the Rational Actor Paradigm to predict whether the board will recommend to accept or to reject the offer. Also, when would something be in the best interest of the shareholders but not in the best interest of the company?

"Twitter confirmed it had received Mr. Musk’s offer and said its board would carefully review the proposal to determine the course of action that it believes is in the best interest of the company and its shareholders" (WSJ, April 2022).

"“I am not playing the back-and-forth game,” Mr. Musk said. “I have moved straight to the end.”

Mr. Musk said he would pay $54.20 a share in cash, representing what he said was a 54% premium over the day before he began investing in Twitter and a 38% premium over the day before his investment was publicly announced.

“It’s a high price, and your shareholders will love it,” Mr. Musk said. “Twitter has extraordinary potential. I will unlock it.”"

"On Wednesday, Twitter shares closed at $45.85. In premarket trading Thursday, the stock rose nearly 9% to $49.90. During the past year, Twitter’s shares have traded between $31.30 and $73.34."

Two addenda

1. After the offer the Board installed a poison pill to make more difficult any acquisition without the Board's approval. Poison Pills can benefit shareholder by creating a bidding war and giving the Board more bargaining power with suitors. They can harm shareholders if they squelch deals that transfer assets from moving to higher valued uses.
2. This opinion (WSJ, April 2022) praises the Board's decisions to install the poison pill and then to agree to terms with Musk.