Elon Musk offers to buy Twitter – Reuters
Elon Musk has offered to buy Twitter for about $41 billion in cash, saying the social media company he has often criticized needs to go private to see effective changes.
Musk’s price of $54.20 per share, which was disclosedin a regulatory filing on Thursday, represents a 38% premium to Twitter’s April 1 close, the last trading day before Tesla CEO’s more than 9% stake in the company was made public.
The billionaire rejected an offer to join Twitter’s board earlier this week after disclosing his stake in the company, a move which analysts said signaled his intention to take over the company as a board seat would have limited his stake to just under 15%.
“Since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company,” Musk said in a letter to Twitter Chairman Bret Taylor.
Musk, who calls himself a free-speech absolutist, has been critical of the social media platform and its policies, and recently ran a poll on Twitter asking users if they believed the platform adheres to the principle of free speech.
“My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder,” Musk added.
Twitter will review Musk’s offer with advice from Goldman Sachs & Co and Wilson Sonsini Goodrich & Rosati, a source told Reuters.
The company’s shares jumped 12% in premarket trading, while those of Tesla fell about 1%. The total deal value was calculated based on 763.58 million shares outstanding, according to Refinitiv data.
Musk has amassed over 80 million followers since joining the site in 2009 and has used the platform to make several announcements, including teasing a go-private deal for Tesla that landed him in hot water with regulators.
He has also been sued by former Twitter shareholders who claim they missed out on the recent run-up in its stock price because he waited too long to disclose his stake.
Twitter’s lower-than-expected user additions in recent months have raised doubts about its growth prospects, even as it pursues big projects such as audio chat rooms and newsletters to end long-running stagnation.
“It would be hard for any other bidders/consortium to emerge and the Twitter board will be forced likely to accept this bid and/or run an active process to sell Twitter,” Wedbush Securities analyst Daniel Ives wrote in a client note.
“There will be host of questions around financing, regulatory, balancing Musk’s time (Tesla, SpaceX) in the coming days but ultimately based on this filing it is a now or never bid for Twitter to accept,” Ives said.
Musk said Morgan Stanley was the financial adviser for the offer.
“Twitter has extraordinary potential. I will unlock it,” Musk said in his letter.
