Twitter Inc. will appoint three new directors to its board and create a committee to review its leadership and governance, as part of an agreement with activist investor Elliott Management Corp. and private equity firm Silver Lake.
Silver Lake will also make a US$1 billion investment in the social media company, which Twitter plans to use to fund part of a US$2 billion share buyback, it said.
Elliott’s head of U.S. activism, Jesse Cohn, will join Twitter’s board immediately alongside Egon Durban, co-Chief Executive Officer of Silver Lake, the firms said in a joint statement. A third independent director will be appointed at a later date.
The board will also form a committee, including Cohn and Durban, that will evaluate a succession plan with Twitter’s current CEO, Jack Dorsey, and make recommendations on the company’s corporate governance, including the potential elimination of its staggered board. The committee plans to share the results of its review by year-end.
The settlement comes a little over a week after Bloomberg News first reported that Elliott took a sizeable stake in Twitter to push for changes at the company, including potentially replacing Dorsey. The New York-based firm nominated four directors to Twitter’s board, people familiar with the matter said at the time.
“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 San Francisco-based Twitter, in Monday’s statement.
Silver Lake’s investment will be made through Twitter’s 0.375 per cent convertible bonds due 2025. As part of Monday’s settlement, Elliott, which owns about a four per cent stake in Twitter, and Silver Lake, have signed a standstill agreement.
Twitter also announced plans to grow its monetized daily active users in 2020 and beyond by 20 per cent or more, accelerate revenue growth on a year-over-year basis and gain share in the digital advertising market. It plans to give more details at its analyst day in the fall.
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