Twitter strikes deal with Elliott
BENGALURU: Twitter Inc. on Monday announced a deal with Elliott Management Corp, giving it a board seat just over a week after the activist hedge fund pushed for the removal of chief executive officer Jack Dorsey.
Under the deal, private equity firm Silver Lake will invest $1 billion in Twitter and also get a board seat. Twitter said it would use its own cash and Silver Lake’s investment to fund a $2 billion repurchase program.
Elliott, founded by billionaire Paul Singer, had sought to install its own nominees to Twitter’s eight-member board when three of the company’s directors stand for election at its upcoming annual shareholder meeting, sources had told Reuters last month.
Twitter said its board has formed a committee to evaluate its leadership structure, CEO succession plan and share the results publicly before the end of the year.
“As a board, we regularly review and evaluate how Twitter is run, and while our CEO structure is unique, so is Jack and so is this company,” said Patrick Pichette, lead independent director of Twitter’s board.
Twitter is one of the few US technology companies headed, but not controlled, by one of its founders. It has given shareholders equal voting rights, making Dorsey, who owns only about 2% of the company, vulnerable to a challenge from an activist investor such as Elliott.
Dorsey, 43, is one of Silicon Valley’s most prominent entrepreneurs, and also runs Square Inc, a mobile payments company he co-founded.
Elliott, which has a 4% stake in Twitter, has named partner Jesse Cohn as a member of the microblogging platform’s board.