Elon Musk has made an offer to buy Twitter for $41.39 billion.
The billionaire Tesla and SpaceX CEO revealed in a regulatory filing that he launched a takeover bid of Twitter just days after he bought a 9.2 per cent stake in the social media platform.
“Twitter has extraordinary potential. I will unlock it,” Musk said in a letter to Twitter’s board on Wednesday, which was made public in a regulatory filing on Thursday.
Musk’s offer price of $54.20 per share represents a 38% premium to Twitter’s April 1 close, the last trading day before the Tesla chief executive’s stake of more than 9% in the social media platform was made public.
The billionaire rejected an offer to join Twitter’s board this week after disclosing his stake, 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 his 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 it 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 the offer with advice from Goldman Sachs and Wilson Sonsini Goodrich & Rosati, a source told Reuters.
Shares in Twitter jumped 12% in premarket trading, while those of Tesla fell about 1%. Based on Twitter’s Wednesday closing price of $45.85, its price in pre-market trading in New York implied a 35% chance of the company accepting Musk’s offer.
The total deal value of $41 billion was calculated based on 763.58 million shares outstanding, according to Refinitiv data.
Musk said U.S. investment bank Morgan Stanley was acting as financial adviser for his offer. He did not say how he would finance the transaction if it goes ahead.
‘SERIAL UNDERPERFORMER’
“The big question for the Twitter board now is whether to accept a very generous offer for a business that has been a serial underperformer and tends to treat its users with indifference,” Michael Hewson, Chief Market analyst at CMC Markets, said after the announcement of Musk’s offer.
Musk has amassed more than 80 million followers since joining Twitter in 2009 and has used it 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.
via Reuters
