Elon Musk, CEO of Tesla, SpaceX and the Boring Company
Twitter’s board has accepted a bid from billionaire and CEO of Tesla to buy the company for $54.20 per share or a cumulative value of $44 million, Twitter announced on Monday. Following the announcement, the company’s stock was up 5.64 percent at the day’s close.
“Twitter, Inc. (NYSE: TWTR) today announced that it has entered into a definitive agreement to be acquired by an entity wholly owned by Elon Musk, for $54.20 per share in cash in a transaction valued at approximately $44 billion. Upon completion of the transaction, Twitter will become a privately held company,” Twitter’s announcement read.
Twitter stockholders will receive $54.20 in cash for each share of Twitter common stock that they own upon closing of the proposed transaction under the terms of the agreement.
Elon Musk has since taken to Twitter to share the big news. “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 included in the press release announcing the $44 billion deal. “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 spambots, and authenticating all humans. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it,” he tweeted.
Earlier today, there were reports that Twitter’s board was ready to accept Elon Musk’s offer to buy Twitter. Reports had it that the board had met on Sunday to discuss Elon Musk’s offer for the company.
The deal, when completed, will see Twitter become a private company. It will also end weeks of Elon Musk and Twitter making the headlines over a possible acquisition. Elon Musk has quite a handful of plans for the company apart from turning it into a private one. He wants to make Twitter a platform that embodies free speech.
Once the deal is complete, Elon Musk becomes the sole owner and controller of Twitter. This has raised concerns for small groups of people. Marc Morial, the President of the National Urban League, recently said that Twitter’s board should consider rejecting Elon Musk’s bid for the company as owning the company could mean causing damage to the safety of Twitter users. In a recent letter sent to Bret Taylor, the Chairman of Twitter’s board, Marc Morial said that Elon Musk’s views surrounding social media and Twitter to be exact raise a lot of concerns. According to him, Elon Musk’s views are in contrast to principles such as creating a safe online community, protecting marginalized groups, and the democracy of the nation, which guide social media companies like Twitter.
Twitter’s board before warming up to the bid had tried to prevent a hostile takeover of the company. The board adopted a “poison pill” otherwise known as a shareholders’ rights agreement. “The Rights Plan will reduce the likelihood that any entity, person, or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgments and take actions that are in the best interests of shareholders,” Twitter said via a statement.
Elon Musk’s offer most likely got considered after he revealed that he had acquired $46.5 billion to finance the deal.
“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,” Bret Taylor, Twitter’s Independent Board Chairman said.
Parag Agrawal, Twitter’s CEO added that “Twitter has a purpose and relevance that impacts the entire world. Deeply proud of our teams and inspired by the work that has never been more important.”
Twitter has a purpose and relevance that impacts the entire world. Deeply proud of our teams and inspired by the work that has never been more important. https://t.co/5iNTtJoEHf
The deal is expected to close soon. The transaction has received full approval from the company’s board and is subject to the approval of stakeholders as well as regulators.
