The board had reached the end of the road.
The day was April 24. The richest man in the world made an offer to buy the company. The social media company adopted a poison pill to stop Mr. Musk from accumulating more of its shares after being alarmed by the out-of-the-blue proposal.
By that Sunday, there were no more choices on the site. Mr. Musk had lined up financing for his offer. The questions the board members were wrestling with were: could the company be worth more than $54.20 a share?
The blockbuster $44 billion deal was announced less than 24 hours later.
The board unanimously decided that the offer from Elon was the best value for our shareholders.
The board of the company went from installing a poison pill to agreeing to sell to Mr. Musk in just 11 days. Adoption of a poison pill can lead to a lengthy fight. The tactic is a sign that a company is going to fight. Negotiations drag on. Sometimes buyers walk away.
Interviews with a dozen people close to the transaction, who were not authorized to speak publicly, show how few options the board had.
There are many types of buyers that deal advisers are prepared to fight off, but there are also many who are willing to negotiate. He was an unknown quantity who was prepared to trash the company and wield his considerable fortune to get an agreement done with limited diligence.
Normal buyers want to see how the business is going and get more data than is available to the public.
The board discussions were not comment on by the company. Mr. Musk didn't reply to the request for comment.
The groundwork for the deal was laid in January when Mr. Musk began buying stock in the company. He made his holdings known in a securities filing and was offered a seat on the board. Mr. Musk initially agreed to the idea before changing his mind.
On the evening of April 13, Mr. Musk sent a text message to Mr. Taylor. Mr. Taylor is a co-chief executive of the company.
Mr. Musk told Mr. Taylor that the offer letter would be public in the morning. The exchange was included in the filing.
A bare-bones offer letter arrived from Mr. Musk the next morning. He intended to buy the company for $54.20 a share, but there were no details about his plans or financing.
The investment bank Morgan Stanley was hired by Mr. Musk. Morgan Stanley's technology banking practice leader, Mr. Grimes, led the 2012 public stock offering of Facebook and other tech companies, while the company's vice chairman, Mr. Armstrong, was promoted recently.
The people with knowledge of the discussions said that the board did not know how to handle Mr. Musk's bid. Mr. Musk did not have a track record of buying companies and did not follow through on some deals, including one in which he said he would take his car company,Tesla, private but then did not.
The poison pill was approved by the board after Mr. Musk's bid became public. To defend itself, it turned to Goldman and JP Morgan. The law firm Simpson Thacher & Bartlett was added to the Wilson Sonsini law firm.
The company declined to comment. Goldman, Morgan Stanley and Simpson Thacher didn't have anything to say.
Mr. Musk was not deterred. His bankers were trying to find tens of billions of dollars in financing for a deal. His advisers presented prospective lenders with a few pages vaguely outlining Mr. Musk's goals. A person with knowledge of the calls said the billionaire talked directly with banks.
That helped convince Citigroup, Bank of America, and other banks to put their money in. The person said that Mr. Musk's past successes and wealth reassured the lender.
Mr. Musk was campaigning for a deal. If the company's board did not accept his proposal, he would take it directly to shareholders. On April 16, he wrote, "Love me tender." Three days later, he wrote, " is the Night."
The board fractured. On April 16, Jack Dorsey, who stepped down as chief executive in November and is a board member, said that the board had been a consistent problem.
Two people who worked on the deal said that Mr. Dorsey's criticism rankled other board members. One person said that Mr. Taylor asked Mr. Dorsey to stop using his account in a negative way. Mr. Dorsey continued to post about the board.
A spokesman for Mr. A spokeswoman for Mr. Taylor wouldn't comment.
On April 21, Mr. Musk lined up $46 billion in financing. He had obtained commitments from Morgan Stanley and other lenders for $13 billion in debt financing. Mr. Musk said he would use $21 billion in cash to buy the rest of the company's equity.
The financing made the board take Mr. Musk seriously. Two people familiar with the deliberations said there were no other offers for the company.
People with knowledge of the situation said that Mr. Taylor weighed employee uncertainty and societal implications of a deal versus the board's fiduciary duty. It was important to make a decision based on the value that Mr. Musk had put forward.
Mr. Taylor was one of the board members who debated whether the user and revenue growth prospects were realistic. The San Francisco company had not turned a profit in the last decade and had set aggressive business targets.
In February of 2021, the stock of the social media company went to more than 77 dollars a share, thanks to a surge of new users. Its advertising business was not as good as those of competitors, and as the Pandemic boost wore off, its shares fell below $40.
Some board members were wary of having a figure such as Mr. Musk swoop in, since they already relied on such figures.
A person close to the discussions said that Mr. Musk was about to start a tender offer. The co-chief executive of Silver Lake, who had worked with Mr. Musk on his failed attempt to take the company private, was a potential ally on the board. The board was told that Silver Lake wasn't teaming up with Mr. Musk to provide financing for a takeover, two people said.
Through a spokesman, Mr.
A person with knowledge of the call said that Mr. Musk spoke with Mr. Taylor and threatened to make a hostile bid for the company.
The board decided that it had to make a deal with Mr. Musk. The board members agreed that the company couldn't hit $54.20 a share on its own.
A person with knowledge of the call said that Mr. Taylor told Mr. Musk that the company would sell. Mr. Musk wrote a letter to Mr. Taylor threatening a hostile bid.
If Mr. Musk walked away from the deal, it would be important to have a six-month closing date. A person familiar with the negotiations said that Mr. Musk personally signed off on each point of the financing.
Mr. Musk took a victory lap after the agreement was announced.
He posted an image of rockets, stars and hearts.
Kate Conger contributed reporting.
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