Saturday 24 June 2017

Twitter shares plunge as lurking suitors reluctant to bid

People holding mobile phones are silhouetted against a backdrop projected with the Twitter logo in this illustration picture taken in Warsaw. Photo: Reuters
People holding mobile phones are silhouetted against a backdrop projected with the Twitter logo in this illustration picture taken in Warsaw. Photo: Reuters

Rishika Sadam and Tenzin Pema

Twitter shares plunged yesterday, a day after technology website Recode reported that Alphabet's Google and Disney would not bid for the social network and Apple was unlikely to be a suitor.

The company has requested binding acquisition bids within the next two weeks, Reuters reported on Wednesday, and hopes to wrap up sale negotiations before the end of the month.

Google was a likely contender for the microblogging service, Recode reported, but those familiar with the deal said the company was not moving forward with an effort to buy Twitter at this time.

Twitter's shares fell as much as 19.2pc to $20.10, valuing the company at about $14.2bn (€12.7bn). They were last down 17.2pc at $20.60 each.

Salesforce.com is now left as the only potential buyer, Recode said, although the cloud-software maker has not confirmed publicly that it wants to make a bid.

Salesforce chief executive Marc Benioff told CNBC on Wednesday that Twitter was "an exciting product, but obviously the business has a lot of challenges." The rationale for Salesforce bidding on Twitter is not clear, said Jefferies analyst John DiFucci in a note to clients.

Buying Twitter would reduce the value of Salesforce shares by about $11 through dilution, while increased debt could cut another $9.50 from the stock.

Salesforce's shares were up 3.6pc at $70.90 yesterday.

Other potential bidders beyond Salesforce are taking a look at Twitter, CNBC said, citng sources. Google might not be out of the running entirely, said Patrick Moorhead, analyst from Moor Insights & Strategy.

Reuters

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