Elon Musk and Twitter reach agreement for $44bn takeover
Although the agreement isn’t the final step, the announcement means the Tesla founder is in the end game of acquiring the social media platform.
Tuesday 26 April 2022 00:54, UK
Twitter has reached an agreement for billionaire Elon Musk to buy the social media platform in a $44bn (£34.6bn) deal.
The announcement followed, what were reported to be, extensive discussions between Mr Musk and Twitter’s board starting on Sunday that stretched into Monday.
Mr Musk announced an offer to buy the social media platform on 14 April for $54.20 a share, or about $43bn, saying that he was not doing it to make money but to unlock Twitter’s potential.
The additional $1bn price tag is understood to reflect the purchase of additional shares revealed by Twitter.
The purchase price represents a 38% premium to Twitter’s closing stock price on 1 April, which was the last trading day before Mr Musk disclosed his 9% stake.
The deal means Twitter is now on course to be taken private, ending its run on the stock market which began in 2013.
Its shares, briefly suspended for the announcement, were 6% up on the news but trading at $51 per share – well below the offer price of $54.20 – possibly indicating that some scepticism remained over the takeover.
The new talks were prompted by Tesla and SpaceX chief Mr Musk disclosing that he had secured financing for his offer, despite the company adopting a “poison pill” strategy, driving shareholders to urge the company’s management not to let a deal slip away.
Bret Taylor, Twitter’s independent board chair, said of the numbers: “The Twitter board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing.
“The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”
Mr Musk added: “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.
“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.”
ANALYSIS BY GREG MILAM, US CORRESPONDENT
There is a certain logic to such a prolific tweeter as Elon Musk being its new billionaire owner.
The boss of Tesla and SpaceX has a love-hate relationship with the social media platform, revelling in its opportunities for provocation and mischief-making but frustrated by what he sees as restrictive rules.
Once his take-over has negotiated the regulatory hurdles, Musk will get to set those rules himself.
So far, he has only committed himself to making “the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans” as ways of improving Twitter.
But, in the past, he has pondered making the much-discussed edit button a reality and even creating a paid-for premium Twitter service.
There are plenty in the tech industry who are agog at the money he has splashed out on a business that is yet to really show its true money-making worth. He says it is not about the money, but the ‘public square’ Twitter represents.
Many also wonder if Musk-the-owner will be as erratic as Musk-the-tweeter: he landed himself in a libel trial, a row with the Securities and Exchange Commission and spent last weekend mocking Bill Gates.
As we have seen time and again, getting it right for a social media platform is far from easy, and dealing with abuse and hate speech will now be Elon Musk’s headache.
Dismiss the world’s man at your peril though. As idiosyncratic as he is, he can point to two weighty success stories in Tesla and SpaceX as evidence that he can prove the doubters wrong.
Mr Musk, who is a regular user of the platform, made the surprise offer to buy Twitter earlier this month.
It came just days after he rejected a seat on the social media company’s board, which would have stopped him from taking over the company.
The meme-posting billionaire, who is now the wealthiest man in the world according to the Bloomberg Billionaires Index, now needs to win a shareholder vote and subsequently secure regulatory approval.
The statement said the deal was expected to close later this year.