Twitter Rejects $500 Million Takeover Offer From Facebook
The $500 million offered was in an all-stock form, said sources on both sides, at the $15 billion valuation that came from the Microsoft investment in the company last October.
The Twitter side felt that figure was inflated and the shares should be valued at the lower figures that have also been reported for Facebook’s true valuation, more in the $5 billion range.
That would have given the deal a $150 million price tag, which was seen as too low, especially since it was in Facebook stock and not cash.
In fact, Twitter wanted cash, which was not possible for Facebook, or Facebook stock at an even lower valuation that $5 billion.
But, said several sources close to Twitter, the primary reason for not selling was because its board simply did not want to yet or perhaps ever.
Said one source: “The question is, is it really a good idea to sell on the first chance you get?”...
“It’s more about timing,” said one person familiar with Twitter’s motivations. “There is a strong feeling that there is still an opportunity–even with the economic downturn–to blow this thing out.”
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