Twitter could see $ 60- $ 65 / share in potential private equity deal, analyst says (NYSE: TWTR)

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Twitter (NYSE: TWTR) may be worth $ 60- $ 65 / share in a private equity takeover of the firm, according to a Wells Fargo analyst. Twitter shares rose 4.7%.

A $ 65 / share offer for TWTR would get generate “just” 21% IRR for a potential PE buyer, Wells Fargo analyst Brian Fitzgerald, who has an equalweight rating and $ 42 price target, wrote in a note earlier and discussed on CNBC. A single buyer at $ 65 / share would likely need to inject $ 40 + billion of equity capital or there’s the potential for a “club deal” and / or significant equity “rollover.”

“In our view, this would require broad alignment among an array of stakeholders on strategy, which we view as challenging to achieve given a lack of clear consensus on 1) TWTR’s problems and 2) potential solutions,” Fitzgerald wrote in the note.

Wedbush analyst Dan Ives earlier said he sees a possibility Musk would be to team up with a strategic partner and boost the bid to roughly $ 60 per share. Ives noted this price is likely seen as a “more appropriate level” by many shareholders.

On Friday, it was reported that private equity firm Thoma Bravo was looking at buying Twitter (NYSE: TWTR). Ives mentioned it’s unlikely that Twitter would be bought by private equity, due to its business model and low free cash flow.

On Saturday, there were media reports that Musk is said to be talking to investors who would partner with him on an offer for Twitter. A new plan involving partners could be announced within days, according to a NY Post report.

Musk hinted in a Tweet on Saturday that he could potentially go directly to TWTR shareholders with a tender offer.

“In our view, TWTR’s BoD is in a tough spot — the validity of Mr. Musk’s bid remains uncertain and accepting a bid below the 52-wk high of $ 73 is difficult, while rejecting the bid risks sending shares back toward recent lows,” Wells Fargo’s Fitzgerald wrote.

Earlier, Twitter added details on poison pill plan.

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