It became known, that Twitter Inc is going to strike a deal with Elliott Management Corporation, giving it a seat in a board just after a week the hedge fund activist Elliot shifted CEO Jack Dorsey.
According to that deal, private company Silver Lake plans to invest $1 billion in social media giant, getting also a board seat. Twitter in its turn added, that it would inject extra cash as well as Silver Lake’s investment to fund a $2 billion repurchase scenario.
Elliott, organized by billionaire Paul Singer, tried to establish its own applicants to Twitter’s 8-member board when 3 of the company’s directors claimed for election at its next annual shareholder meeting, according to Reuters’ sources last month.
Twitter let know its board has designed a committee to assess its leadership network, CEO continuity scenario and disclose the results before the end of the current year.
Twitter is one of the few U.S. tech firms headed, but not guarded, by one of its creators. It has given shareholders equal right of vote, making Dorsey, owning only around 2 percent of the company, unsafe to a challenge from an activist investor such as Elliott.
Dorsey is one of Silicon Valley’s most famous entrepreneurs is also running Square Inc, a mobile payment services firm he co-founded.
Elliott, which owns a 4 percent stake in Twitter, has named partner Jesse Cohn as a member of the micro blogging project’s board.
Twitter shares gained 0.84 percent at 1531 GMT.