Twitter CEO Jack Dorsey strikes private equity investment deal in peace agreement with activist investor Elliott Capital

Silver Lake Partners to invest $1 billion in Twitter, which will be used to fund a share buyback, while Dorsey will stay on as CEO – for now

Twitter's Jack Dorsey has engineered a peace deal with activist investor Elliott Capital that will see him stay on as CEO, while private equity firm Silver Lake Partners will invest $1 billion in the company.

Silver Lake's investment will be used to part-fund a $2 billion share buyback scheme, together with the company's current cash-in-hand. However, the agreement means that Dorsey will have to share the board of the company with two new directors approved by both Silver Lake and Elliott Capital: Egon Durban, co-CEO and managing partner of Silver Lake, and Jesse Cohn, a partner at Elliott Capital.

A third independent director will also be added to Twitter's board.

Dorsey retains a two per cent stake in Twitter - and is also CEO of mobile payments company Square, where he maintains a substantial stake - while activist investor Elliott Capital holds a four per cent stake.

The moves come after Elliott Capital nominated four directors to Twitter's board as part of a campaign to have Dorsey removed as CEO. The activist investor had argued that Twitter needed 100 per cent of Dorsey's work time and focus, rather than being a side-gig to his role as CEO of Square.

Part of the agreement will entail the creation of a committee to evaluate Twitter's leadership structure and CEO succession plan - an indication, perhaps, that the deal will see Dorsey levered out of the company in the longer term.

Pointedly, perhaps, Silver Lake's tweet did not get so much as a 'like' from Dorsey, let alone a retweet

In response, Silver Lake Capital tweeted its approval of the deal in its first tweet since joining in September 2014, claims that it was "excited to partner with @Twitter" and join the board to work "alongside @Jack… to drive long-term innovation and success at this revolutionary company".

Pointedly, perhaps, Silver Lake's tweet did not get so much as a 'like' from Dorsey, let alone a retweet.

Dorsey, meanwhile, voiced his approval in the more traditional fashion of the corporate press release: "Silver Lake's investment in Twitter is a strong vote of confidence in our work and our path forward. They are one of the most respected voices in technology and finance and we are fortunate to have them as our new partner and as a member of our Board."

It is not the first time that Elliott Capital has turned its attention to the technology sector, with Elliott also being instrumental in the privatisation of BMC Software in 2013. Silver Lake Partners, meanwhile, helped to fund Michael Dell's privatisation of Dell, the PC and server giant he founded in the 1980s.