Elon Musk’s Twitter profile is seen on a smartphone set against printed Twitter logos in this photo illustration taken April 28, 2022. REUTERS/Dado Ruvic/Illustration//File Photo
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NEW YORK, Aug 30 (Reuters) – Investors in Twitter ( TWTR.N ) should vote to approve Elon Musk’s $44 billion plan to buy the social media company, proxy advisory firm Institutional Shareholder Services said on Tuesday ( ISS).
The ISS recommendation was widely expected to be in favor of the deal given that valuations of tech companies fell after Musk signed his deal in April to buy Twitter for $54.20 a share. Twitter shares are now around $40.
“A vote FOR this proposal is warranted,” ISS wrote in its report, citing the benefits of Musk’s all-cash offer, which provides liquidity and shareholder value. Moreover, there hasn’t been much shareholder opposition to Musk’s plan, ISS said, adding another reason to support it.
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Shareholders will vote on the issue on September 13.
However, Musk is currently reluctant to proceed with the deal and the case will be heard in a Delaware court in October.
Twitter sued Musk after he informed the company that he did not plan to proceed with the deal, arguing that he had been misled about the number of spam accounts on its platform. Musk has also seized on a whistleblower’s allegations on Twitter about cybersecurity issues at the company.
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Despite the pending lawsuit, ISS wrote that even if the deal were delayed or completed, “it appears that the most prudent course of action for shareholders at this time is to focus on the fundamentals of the transaction itself.”
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Reporting by Greg Roumeliotis and Svea Herbst-Bayliss in New York; editing by Jonathan Oatis
Our Standards: The Thomson Reuters Trust Principles.
