Elon Musk’s shock provide to buy Twitter for his original price of $44 billion adopted shrewd maneuvers by a board member who — along with a giant stake in Twitter — additionally occurs to personal a piece of the New York Knicks and Rangers, sources inform The Publish.
Egon Durban — the founder and co-CEO of Silicon Valley hedge fund Silver Lake Partners, which owns about 10% of the Knicks and Rangers — took a hardline stance in negotiations with Musk when different administrators appeared keen to take a settlement to finish the authorized standoff, sources near the scenario stated.
Forward of his provide to pay full worth for Twitter this Tuesday, Musk beforehand approached the corporate with a number of proposals to pay lower than $54.20 per share. Durban helped persuade fellow board members to not blink, sources stated.
“I do know early on [Durban] by no means wished to settle,” one supply near the scenario stated. “He wished to ensure Elon was held accountable.”
Durban was additionally approached months ago by Musk’s super agent friend Ari Emanuel, who tried in useless to dealer a settlement, sources stated. Information of Emanuel’s method was first reported by Bloomberg.
Durban’s powerful stance nonetheless seems evident in Twitter’s method to Musk’s current provide. The Delaware Court docket of Chancery has ordered Musk to undergo with the unique deal by Oct. 28 or face Twitter’s lawsuit in courtroom.
“It’s put up or shut up time for Elon,” a supply near the scenario stated of Twitter’s place. “He doesn’t get to renegotiate the merger. He simply has to attempt to shut.”
Sources stated Durban’s push for $54.20 per share comes largely from $1 billion in convertible Twitter shares that Silver Lake bought in March 2020. Silver Lake can redeem the shares at $41.50 a chunk, based on regulatory filings.
Durban’s massive wager on Twitter might assist ship a payday for Silver Lake by offsetting any losses from this yr’s tech inventory crash.
If Musk finally ends up paying $54.20 a share, Silver Lake will log a 31% return over two and a half years, filings present. If Twitter had theoretically settled and accepted $48 per share, for instance, Silver Lake would have reported a way more modest 16% return.
Non-public fairness corporations like Silver Lake are extremely incentivized to ship double-digit returns on funds. If a fund delivers an annual return of 8% or extra, they usually can maintain 20% of the earnings — but when the return is decrease than that threshold, the non-public fairness agency doesn’t maintain any of the earnings.
Durban’s agency additionally has a historical past with Musk. Musk employed Silver Lake in 2018 to guide his deal crew when he thought of taking Tesla non-public together with legislation agency Wachtell Lipton. Wachtell has additionally suggested Twitter in its tense negotiations with Musk.
Silver Lake, which owns a ten% stake within the Knicks and Rangers’ mum or dad firm Madison Sq. Backyard Sports activities, declined to remark. Twitter additionally declined to remark.
