Elon Musk, one of
the world’s richest men, has been unrelenting in his pursuit of Twitter, one of
the world’s biggest social media networks. From attacking Twitter’s board, to
refusing a seat at the table, to vowing to buy a 100% stake, Musk has tried it
all. So much so, that Twitter had to swallow a poison pill to keep Musk at bay.
Having realised that his current pursuit isn’t yielding the desired result,
Musk seems to be trying a “tender” approach.

Tenderness has
been on Musk’s mind over the last few days. His tweets are lined with
references to Elvis Presley’s “Love Me Tender” and F. Scott Fitzgerald’s novel “Tender
Is the Night” whose title is taken from John Keats’ “Ode to a Nightingale” and he really is looking at the social media giant to fulfil some
of his dreams, if not all. For a man who seeks to colonise Mars, that’s not
little.

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Musk had initially
pledged $43 billion to acquire all of Twitter. But Twitter said it was
too little and swallowed a poison pill to stop anyone from acquiring over 15%
of the company. If Musk’s $54.20-a-share bid is rejected by Twitter’s board,
one of the options available to him would be going tender, and it is an option he has confirmed that he will exploring, according to a Wall
Street Journal report.  

Also Read | Why Elon Musk wants to buy Twitter: Explained

Making a tender
offer is one of two ways to buy a publicly-traded company. While the easiest way
is to have a board-approved merger, another, the ‘tender’ way is to appeal
directly to shareholders to sell or tender their shares at a specific price.
This strategy is applied when a company’s board doesn’t want to engage.

Also Read | Elon Musk attempts to secure funding to buy Twitter: Report

And as opposed to
the board-approved strategy, a tender offer is often not an all-or-nothing game.
While the buyer may bid for all the shares, they may also go away with just
over 50% in order to obtain a controlling stake. When a tender offer seems to
be on the way to succeed, boards typically capitulate.

If Musk is to make
a tender offer to Twitter shareholders, he will have to announce the offer at a
specific price with some regulatory paperwork. The offer will have to be on the
table for 20 days and Twitter’s board will have 10 days to make its own
recommendation to the shareholders. If Musk doesn’t obtain the number of tenders
he wants, he may cancel or amend the offer.

Also Read | Why is Twitter swallowing a poison pill? To stop getting eaten up by Musk

However, one thing
that still stands between Musk and the tender approach is the poison pill. The
poison pill disallows a shareholder from owning over 15% stake and Musk already
owns nearly 9%. However, a successful tender offer would send a message to the Twitter
board, who will not want to miff shareholders, especially with the company’s
annual meeting scheduled for May 25.