Twitter Inc. announced Monday that it has accepted Tesla CEO Elon Musk’s $44 billion takeover bid, an unprecedented sale to the world’s richest man, who plans to reshape the media brand’s operations.
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Under the terms of the deal, Musk and financial backers will acquire Twitter for $54.20. The price represents a premium of 38% on Twitter’s stock price on April 1, the day before Musk disclosed he purchased a 9% stake in the company.
Musk launched his bid to buy Twitter earlier this month, although it the details were left vague on how he would go about funding such an enormous deal. Twitter’s board responded by approving a “poison pill,” a mechanism that would make it more costly for any outside investors to buy more than 15% of the company, in an attempt to limit Musk’s acquisition capabilities.
On April 21, Musk informed the SEC and regulators he had lined up $46.5 billion, including $25.5 billion in debt financing from various banks and $21 billion in equity from himself. Negotiations followed, resulting in Twitter’s board unanimously accepting Musk’s offer on Monday.
“The Twitter board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing,” Twitter Chairman Bret Taylor said in a statement Monday. “The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”
Musk previously stated that Twitter requires a transformation in order to regain its status as a trusted and “inclusive” platform for online discourse, that transformation entails taking Twitter private according to the billionaire. Twitter has defended its content moderation policies vehemently.
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk said in a statement. “I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential — I look forward to working with the company and the community of users to unlock it.”
Musk’s proposal is subject to the approval of the social media behemoth’s stockholders and regulators, plus other closing conditions.
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