Facebook tried to buy Twitter

Investor Peter Thiel has revealed that Facebook was in takeover talks with Twitter last autumn, although disagreements over price and structure scuppered a deal.

Twitter would have been paid for with Facebook stock, however, the two sides could not agree on a valuation of the company.

In 2007, Microsoft bought preferred stock in Facebook valuing the company at $15 billion. However, court documents show that an internal valuation of Facebook’s common stock put its value at about $3.7 billion.

Speaking to Business Week, Thiel said: “It became pretty clear it wasn’t going to happen. The deal would have to be done with Facebook stock. And then you have to figure out how much the stock is worth.”

The Twitter deal was reported to be worth $500 million. Facebook also offered $100 million in cash and the rest in stock – based on Facebook’s own valuation of $8-9 billion.

Although no deal was made, the two companies continue to talk albeit without seriously discussing a renewed takeover.