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."
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