The tech billionaire Elon Musk has offered to buy Twitter for $41.4bn.
A regulatory filing showed on Thursday that Musk was offering $54.20 a share – a 38% premium to the closing price of Twitter’s stock on 1 April, the last trading day before the Tesla chief executive’s investment of more than 9% in the company was publicly announced.
More to follow…
https://web.archive.org/web/20220414104629/https://twitter.com/disclosetv/status/1514555103625330693
Elon Musk has made a “best and final” offer to buy Twitter Inc., saying the company has extraordinary potential and he is the person to unlock it.
The world’s richest person will offer $54.20 per share in cash, representing a 54% premium over the Jan. 28 closing price and a valuation of about $43 billion. The social media company’s shares soared 18% in pre-market trading.
Musk, 50, announced the offer in a filing with the U.S. Securities and Exchange Commission on Thursday, after turning down a potential board seat at the company. The billionaire, who also controls Tesla Inc., first disclosed a stake of about 9% on April 4. Tesla shares fell about 1.5% in pre-market trading on the news.
Twitter said that its board would review the proposal and any response would be in the best interests of “all Twitter stockholders.”
The bid is the latest saga in Musk’s volatile relationship with Twitter. The executive is one of the platform’s most-watched firebrands, often tweeting out memes and taunts to @elonmusk’s more than 80 million followers. He has been outspoken about changes he’d like to consider imposing at the social media platform, and the company offered him a seat on the board following the announcement of his stake, which made him the largest individual shareholder.
After his stake became public, Musk immediately began appealing to fellow users about prospective moves, from turning Twitter’s San Francisco headquarters into a homeless shelter and adding an edit button for tweets to granting automatic verification marks to premium users. One tweet suggested Twitter might be dying, given that several celebrities with high numbers of followers rarely tweet.
Unsatisfied with the influence that comes with being Twitter’s largest investor, he has now launched a full takeover, one of the few individuals who can afford it outright. He’s currently worth about $260 billion according to the Bloomberg Billionaire’s Index, compared with Twitter’s market valuation of about $37 billion.
In a letter to Twitter’s board, Musk said he believes Twitter “will neither thrive nor serve [its free speech] societal imperative in its current form. Twitter needs to be transformed as a private company”
The takeover is unlikely to be a drawn-out process. “If the deal doesn’t work, given that I don’t have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder,” said Musk.
Musk informed Twitter’s board over the previous weekend that he thought the company should be taken private, according to today’s statement.
The $54.20 per share offer is “too low” for shareholders or the board to accept, said Vital Knowledge’s Adam Crisafulli in a report, adding that the company’s shares hit $70 less than a year ago.
Although Musk is the world’s richest person, how he will find $43 billion in cash has yet to be revealed.
“This becomes a hostile takeover offer which is going to cost a serious amount of cash,” said Neil Campling, head of TMT research at Mirabaud Equity Research. “He will have to sell a decent piece of Tesla stock to fund it, or a massive loan against it.”
Musk has hired Morgan Stanley as his adviser for the bid. The offer price also includes the number 420, widely recognized as a coded reference to marijuana. He also picked $420 as the share price for possibly taking Tesla private in 2018, a move that brought him scrutiny from the SEC.
“There will be host of questions around financing, regulatory, balancing Musk’s time (Tesla, SpaceX) in the coming days,” said Dan Ives, analyst at Wedbush. “But ultimately based on this filing it is a now or never bid for Twitter to accept.”
EXCLUSIVE Twitter set to accept Musk's 'best and final' offer-sources
Twitter Inc (TWTR.N) is nearing a deal to sell itself to Elon Musk for $54.20 per share in cash, the price that he originally offered to the social media company and called his 'best and final', people familiar with the matter said.
Twitter may announce the $43 billion deal later on Monday once its board has met to recommend the transaction to Twitter shareholders, the sources said. It is always possible that the deal collapses at the last minute, the sources added.
Twitter has not been able to secure so far a 'go-shop' provision under its agreement with Musk that would allow it to solicit other bids from potential acquirers once the deal is signed, the sources said. Still, Twitter would be allowed to accept an offer from another party by paying Musk a break-up fee, the sources added.
Twitter and Musk did not immediately respond to requests for comment.
Twitter and Elon Musk Strike Deal for Takeover
Twitter Inc. TWTR 5.52% on Monday accepted Elon Musk’s bid to take over the company, giving the world’s richest man control over the influential social-media network where he is also among its most powerful users.The deal marks the close of a dramatic courtship and a sharp change of heart at Twitter, where many executives and board members initially opposed Mr. Musk’s takeover approach. The deal has polarized Twitter employees, users and regulators over the power tech giants wield in determining the parameters of acceptable discourse on the internet and how those companies enforce their rules.
The two sides worked through the night to hash out a deal. Earlier on Monday, The Wall Street Journal reported Twitter and Mr. Musk had reached an agreement to value Twitter at $44 billion.
The takeover, if it goes through, would mark one of the biggest acquisitions in tech history and will likely have global repercussions for years to come related to how billions of people use social media. Mr. Musk, who is also chief executive of Tesla Inc. TSLA -1.30% and Space Exploration Technologies Inc., must find a way to balance his commitment to less moderation with the business needs of a company that has struggled to reconcile free-wheeling conversation with content that appeals to advertisers.
On Monday, after the Journal reported that a deal was close, Mr. Musk tweeted to indicate that he wants the platform to remain a destination for wide-ranging discourse and disagreement.
“I hope that even my worst critics remain on Twitter, because that is what free speech means,” he wrote.
The San Francisco-based social-media company had been expected to rebuff the offer, which Mr. Musk made April 14 without saying how he would pay for it.
Twitter, a day after the unsolicited offer, adopted a so-called poison pill, designed to make it more difficult for Mr. Musk to reach more than a 15% stake in the company.
Twitter changed its posture after Mr. Musk detailed elements of his financing plan for the takeover. On April 21, he said he had $46.5 billion in funding lined up. Twitter shares rose sharply, and company executives opened the door to negotiations.
Twitter shares were ahead more than 5% in afternoon trading on Monday.
The potential turnabout on Twitter’s part comes after Mr. Musk met privately Friday with several shareholders of the company to extol the virtues of his proposal while repeating that the board has a “yes-or-no” decision to make, people familiar with the discussions said.
Mr. Musk, with over 82 million Twitter followers, has long used the platform to pronounce his views on everything from space travel to cryptocurrencies. In January, he began buying Twitter stock, becoming the single-largest individual investor with a more than 9% stake by April.
He has previously used Twitter to escalate a conflict with the Securities and Exchange Commission after the agency opened a probe into some of his recent stock sales, and he often blasts his critics on the social network.
Twitter, at the beginning of the month, invited Mr. Musk to join its board—which would have prevented him from owning more than 14.9% of the company’s stock. Mr. Musk initially agreed and then rejected the offer.
Twitter has already embarked on a turnaround plan after a fight with activist Elliott Management Corp. about two years ago. Twitter said a little over a year ago that it would work to at least double its revenue to $7.5 billion by the end of 2023 and reach at least 315 million so-called monetizable daily active users at that time.
Mr. Musk’s proposed changes for the platform include softening its stance on content moderation, creating an edit feature for tweets, making Twitter’s algorithm open source—which would allow people outside the company to view it and suggest changes—and relying less on advertising, among other ideas.
Mr. Musk, a self-described “free speech absolutist,” said in a recent interview at a TED conference that he sees Twitter as the “de facto town square.”
Twitter should be more cautious when deciding to take down tweets or permanently ban users’ accounts, Mr. Musk said, pointing to temporary suspensions as a better solution.
Mr. Musk said he also wants the platform to be more transparent when it takes action that amplifies or reduces a tweet’s reach. He said he wasn’t certain how some of those ideas would be implemented.
Twitter has spent years advocating for healthier discourse on its platform and adding content moderation, arguing at least in part that it is good for business.
The company also has introduced new features that have been gaining some traction with users, including Twitter Spaces, which allows people to host live audio conversations with each other within the platform.
Mr. Musk has said he wants Twitter to rely less on advertising—which provided roughly 90% of its revenue in 2021—and shift its business model more toward subscriptions. The platform currently offers a subscription-based service called Twitter Blue, which gives customers premium features like “undo tweet” for $2.99 a month. He suggested removing all ads on Twitter as part of the subscription offerings.
Mr. Musk also floated the idea of cutting staff, shuttering the company’s San Francisco headquarters building and not giving the board of directors a salary. The latter could save roughly $3 million a year alone, he said.
His other proposed changes for Twitter include trying to stop spam and scam bots and allowing for longer tweets. The current limit is 280 characters.
On Thursday, Twitter is scheduled to announce its first-quarter earnings.
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