Twitter’s board of directors has agreed to sell the company for about $44 billion to Elon Musk, a deal that gives the world’s richest man control of the influencer social media platform.
Announcing the deal, Musk said “free speech is the cornerstone of a working democracy” and described the social media platform as a “digital town square where issues matter.” for the future of humanity is debated”.
Musk’s privacy on Twitter could turn the Tesla executive, who has used the platform to attack regulators and critics, into a new age media baron because millions of people rely on the San Francisco-based platform for news.
Shareholders of the platform will receive $54.20 cash for each share of Twitter common stock at the close of trading. The purchase price was equivalent to 38% of the company’s closing price on April 1, the day before Musk revealed he had built a 9% stake in the company.
Musk said he wants to make Twitter “better than ever” by introducing new features, making its algorithms open source, eliminating bots, and authenticating “all humans.”
“Twitter has huge potential – I look forward to working with the company and the user community to unlock it,” he added.
The deal includes a series of unexpected moves by Musk that have crossed Wall Street and Silicon Valley. Within three weeks, Musk became one of the company’s largest shareholders and was offered a seat on the board. he refused. He then placed an unsolicited bid for the company on April 14 at $54.20 a share — widely interpreted as a reference to cannabis culture.
Twitter initially tried to thwart Musk’s advancement, making a poison to limit his ability to acquire a substantial share. But the board was forced to the negotiating table over the weekend after he unveiled a $46.5 billion funding package for the deal.
The company’s directors also received calls from some of the largest shareholders, including active and passive investors, push them to accept the offer, people talk briefly about chats. Investors are less confident that the share price will rise significantly higher than Musk’s offer in the near term.
If completed, the deal would be one of the most leveraged deals on record — a feat few on Wall Street thought was possible given the size of the deal. The company said the deal is expected to close this year, subject to approval from shareholders and regulators.
“The Twitter Board of Directors conducted a thoughtful and comprehensive process to evaluate Elon’s proposal with a focus on value, certainty, and finance,” said Bret Taylor, Twitter president.
He added: “The proposed transaction will yield a substantial cash premium, and we believe it is the best path forward for Twitter shareholders.”
Musk has $25.5 billion increase in debt — including a $12.5 billion margin loan against his stake in Tesla — from a banking group led by Morgan Stanley, his financial advisor. He has also pledged to provide $21 billion in equity for the takeover, leaving him with more than 70% of the purchase price unless he finds other backers.
The deal could still fall apart if blocked by regulators or if Musk fails to fulfill the equity component of the transaction. He is in talks with a number of wealthy individuals and institutional investors about backing that portion of his bid, people briefed on the negotiations.
Musk is legally obligated to provide funds for the deal. A break-up fee also applies, although its terms will not be known until the merger agreement is filed with securities regulators.
In making his offer to Twitter, Musk outlined easing plan the social media platform’s content censorship policies, describing itself as a “liberalist”.
Republicans hope that the deal could pave the way for Donald Trump to return to the platform, after the president has been banned for repeatedly violating hate speech and misinformation rules.
However, Trump appeared to rule out returning to the platform, telling Fox News on Monday that he would communicate through his own social media venture, Social Truth.
The deal will lead to another tumultuous period for employees at Twitter, which recently replaced its chief executive, co-founder Jack Dorsey, with a longtime engineer. Parag Agrawal.
Dorsey backed the deal, writing that Twitter is “the closest thing we’ve got to global consciousness,” but that it’s “owned by Wall Street and the advertising model.” [and] getting it back from Wall Street is the right first step.” Musk has hinted at his plans to shift Twitter away from relying largely on digital advertising.
“I trust his mission is to expand the light of consciousness,” Dorsey said of Musk.
Twitter raced to reassure advertisers following the announcement of the deal, telling them to expect business as usual and underscoring their commitment to its existing product roadmap. themselves, according to screenshots of emails seen by the Financial Times.
Musk has worried some employees after he raised the possibility of closing the company’s San Francisco headquarters while making a series of other controversial proposals, such as paying members. board is 0 dollars.
Agrawal wrote on Twitter on Monday: “Twitter has a purpose and relevance that impacts the entire world. Deeply proud of our teams and inspired by the work has never been more important.”
