Twitter Says Recent Debt Deal Makes Company Harder to BuySarah Frier
Twitter Inc.’s recent debt deal, which raised about $1.8 billion, is set to make it more difficult for an acquirer to swoop in to buy the company.
Twitter said in a regulatory filing today that a September convertible bond offering it held “could deter or prevent a third party from acquiring us even when the acquisition may be favorable to our stockholders or holders of the notes.” Debtholders can require the company to repurchase their holdings if something goes wrong, and Twitter can’t agree to be sold unless the acquirer assumes the liability, the company said.
Jim Prosser, a Twitter spokesman, didn’t immediately respond to a request for comment.
Twitter’s language in the filing follows the sale of two tranches of $900 million in convertible bonds in September. Twitter sold the debt on favorable terms, prompted by the advice of new Chief Financial Officer Anthony Noto, a person familiar with the matter has said. The debt matures in either five or seven years.
The San Francisco-based company, which celebrated the first anniversary of its initial public offering today, has recently been grappling with management shifts and investor questions over strategy. Twitter’s user growth has slowed and losses have widened, even as the company’s digital-advertising revenue has soared. Chief Executive Officer Dick Costolo has changed many top lieutenants this year, including ousting the chief operating officer and appointing a new head of product.
Twitter’s stock rose 1.2 percent to $40.84 at the close in New York. Shares are down 36 percent so far this year, compared with a 9.9 percent gain in the Standard & Poor’s 500 Index.
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