Explainer: How will Twitter's board handle Elon Musk?

STORY: Elon Musk has offered to buy Twitter...for $43 billion in cash.

The social network's board of directors is currently evaluating the bid.

Many investors and analysts say a rejection is likely, barring any changes to the offer from Musk.

Here are some options available to Twitter's board should it decide to turn down the offer.

The first option is to buy more time.

Twitter's board may decide not to engage in sale talks with Musk

and instead give more time to its new CEO to meet the company's operational targets.

The board has adopted a one-year 'poison pill'

that prevents Musk from owning more than 15% of Twitter without its consent.

Agrawal succeeded Jack Dorsey at the helm of the company at the end of November.

The chief executive said in February that he was sticking with the ambitious goals that the company announced in 2021.

Those goals include reaching 315 million average 'monetizable' daily active users

and generating at least $7.5 billion of annual revenue by the end of 2023.

The second option would be to try to negotiate with Musk.

Twitter can offer to open its books to the Tesla boss, hoping that this would lead to a better offer.

This would test Musk's description of the $54.20 per share bid as his - quote - "best and final offer".

The world’s richest man has amassed a net worth of more than $260 billion, according to Forbes.

Musk has not specified how much of his own fortune he would be willing to contribute towards a deal to acquire Twitter.

Twitter's board can also explore strategic alternatives, such as soliciting bids from other parties.

The benefit of this option is that it could identify a better deal

or put pressure on Musk to raise his offer.

The downside is that it could raise the hopes of many investors that Twitter will sell itself.

That could pressure the company to negotiate from a position of weakness,

given that its shares are trading at just a little over half of what they were worth a little over a year ago.

It’s also possible that any alternative transaction that Twitter opts for would not be an acquisition.

In 2020, the company agreed to sell $1 billion in convertible bonds to private equity firm Silver Lake.

Twitter could choose to pursue a similar deal now, raising more cash and avoiding an outright sale.