Elliot Management Corp has invested $1billion on Twitter in exchange for one board seat in the company.
Twitter announced the new deal Monday morning, adding that the private equity firm, Silver Lake would invest $1 billion in Twitter and also get a board seat.
Founded by Paul Singer, Elliot had sought to install its own nominees to Twitter’s eight-member board when three of the company’s directors stand for election at its upcoming annual shareholder meeting, as reported by Reuters.
The new deal between Twitter Inc, Silver Lake and Elliot does not mention any changes to Jack Dorsey as CEO of the blogging platform. According to the terms of the agreement, Elliott Management and Silver Lake will not “comment on or influence, or attempt to influence, directly or indirectly, any Twitter policies or rules, or policy or rule enforcement decisions, related to the Twitter platform.”
[READ MORE: Twitter CEO, Dorsey cancels plans to move to Africa, says tweet was a mistake)
Twitter said it would use its own cash and Silver Lake’s investment to fund a $2 billion share repurchase program. Twitter also revealed that its board had formed a committee to evaluate its leadership structure, CEO succession plan and share the results publicly before the end of the year.
“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 Twitter’s board.
Twitter is one of the few U.S. technology companies headed but not controlled by one of its founders. It has given shareholders equal voting rights, making the founder vulnerable to an activist investor like Elliot even if they only own about 2% of the company.
Elliott launched a campaign to remove Dorsey as CEO after he announced he would temporarily move to Africa while running both Twitter and Square. Dorsey is the only person to lead two public companies with market valuations greater than $5 billion as CEO.
Elliott, which now has a 4% stake in Twitter, has named its head of U.S. activism, Jesse Cohn as a member of Twitter’s board while Silverlake has named co-CEO and managing partner Egon Durban, as a member of Twitter’s board.
According to the release, Twitter Inc continues its search for a third new independent director with expertise in technology and artificial intelligence, a candidate that would “reflect the diversity of the Twitter service”.
Shares of Twitter were down more than 1% Monday morning but briefly spiked on news of the deal.
