Proxy advisor ISS recommends Twitter shareholders back sale to Musk

By Thomson Reuters Aug 30, 2022 | 10:26 AM

NEW YORK (Reuters) -Investors in Twitter should vote to approve Elon Musk’s $44 billion plan to buy the social media company, proxy advisory firm Institutional Shareholder Services (ISS) said on Tuesday.

The ISS recommendation was widely expected to be in favor of the deal given that valuations of technology companies plunged after Musk inked his deal in April to buy Twitter for $54.20 per share. Twitter shares are now hovering 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 value to shareholders. Additionally, there has not been much shareholder opposition to Musk’s plan, ISS said, adding another reason to support it.

Shareholders will be voting on the matter on Sept. 13.

Musk is currently reluctant to proceed with the deal, however, and the matter will be reviewed in a Delaware court in October.

Twitter has sued Musk after he gave notice to the company that he does not plan to go ahead with the deal, arguing he was misled over the number of spam accounts on its platform. Musk has also seized on claims of a Twitter whistleblower regarding cyber security issues at the company.

Despite the pending lawsuit, ISS wrote that even if the deal were delayed or terminated, “it appears that the most prudent course of action for shareholders at this juncture is to focus on the fundamentals of the transaction itself.”

(Reporting by Greg Roumeliotis and Svea Herbst-Bayliss in New York; editing by Jonathan Oatis)