The latest on the Twitter takeover bid...

Elon Musk Says He Has $46.5 Billion in Funding for Twitter Bid 

Billionaire also says he is exploring a tender offer to acquire shares of Twitter directly from shareholders

Elon Musk said he has lined up $46.5 billion to fund his bid for Twitter Inc., TWTR 0.98% ▲ answering the biggest question that had loomed over his takeover offer. In a regulatory filing, Mr. Musk also said he was considering taking his offer straight to Twitter shareholders, bypassing a board that appears dug in. Twitter said Thursday it was reviewing the newly detailed proposal.

The financing commitments—about half in bank debt and half in cash promised by Mr. Musk himself—lend credibility to what had, until now, looked more like a personal lark than a bona fide takeover play. When he lobbed in his bid last week, Mr. Musk didn’t say how he planned to pay for the deal, which is expensive even for the world’s richest man. Now he says he has lined up $25 billion in debt from a group of banks including Morgan Stanley, Bank of America Corp. and Barclays BCS -0.06% ▼ PLC. About half is secured by his shares of Tesla Inc., TSLA 3.40% ▲ which would require him to pledge more than one-third of his $170 billion stake. Mr. Musk will personally commit $21 billion in equity, the deal making equivalent of a down payment on a home.

So this is sort of a double edged sword. Not only has he secured financing, but he secured in such a manner to include as many banks as possible, which would make someone else's takeover attempt next to impossible (if someone decides to step up and compete). Apparently there are only two major banks that would not already be committed to Musk's takeover. The assumption being that there would be a conflict as such for the same bank to be securing financing for two takeover bids for the same company. 

The fact that Musk is thinking about going around the board suggests that he is not as concerned with the poison pill as other seem to suggest he should be. Perhaps he feels that it won't hold up in court, or perhaps he feels that it will not be that effective (given it requires more money by shareholders to buy the reduced cost shares). There is no guarantee that enough shareholders would buy the reduced cost shares, thus diluting his own ownership by less than they intend. More to the point, if the shares are diluted, the individual stock prices go down which would make is offer more attractive and less able to be turned down.

Now everyone expects that the board will turn down the offer and then everyone expects that they will be sued. The question is how that all plays out in court. But the facts are this:

• Since Parag Agrawa has taken over Twitter the shares have dropped from a high of about $70 to where it is today (around $46). 
• This is after Agrawa and his board decided that Twitter was no longer interested in the First Amendment or free speech in general and started banning a large percentage of their users.
• Between Agrawa and the rest of the board, they own almost no stock in the company and have no personal financial interest.
• Agrawa and his board have no legal authority to run twitter as a "woke" company at the expense of the company's value. They are obligated under the laws of a public company to run the company pretty much on the basis of their shareholder's best financial interest.  

So where is their standing if it goes to court? Their political interests in running twitter will be entirely moot. They will need to prove that in spite of Twitter losing about 35%  of it's value under their leadership, that banning, shadow banning, and censoring tweets is a good business plan. More to the point, they will have to prove not only that their plan is so financially sound that they can afford to pass on the 20% payout to their shareholders, but also that the long term plan of being "woke" and "liberal" will be more profitable long term than Musk's plan to open it back up to how it ran when it was worth $70/share.

If I was the judge in this case, I would suggest to Agrawa and his board that if they want to run Twitter in a manner that puts woke politics above the shareholder profit, that they should look into their own bid to buy Twitter, make it private, and run it as they please. Right now they are simply temporarily in charge of a public company that they do not own. Ironically I doubt any of these board members would be running Twitter in this manner if they had their own financial interest at stake.