Elon Musk makes $43 billion hostile bid for Twitter
14 Apr 2022
Elon Musk, the world’s richest man, has offered to buy microblogging and social networking service provider Twitter for $43.39 billion (or $54.20 a share), in cash, according to a regulatory filing on 14 April.
The founder of Tesla made the offer in a filing with the US Securities and Exchange Commission on Thursday.
The offer price of $54.20 per share represents a 38 per cent premium to the closing price of Twitter's stock on 1 April, the last trading day before Musk revealed his investment that makes for over nine per cent of Twitter’s total stock on 4 April.
Musk launched the hostile takeover bid for Twitter, insisting it was his "best and final offer" and that he was the only person capable of unlocking the full potential of the social networking platform.
“Twitter has extraordinary potential, I will unlock it,” the Tesla chief said after launching the hostile bid.
Twitter's board said it would carefully review what it termed Musk's "unsolicited, non-binding" offer and decide on a course of action that was "in the best interest of the company and all Twitter stockholders
The board if Twitter has already appointed Elon Musk to its board after the billionaire co-founder and chief executive of electric vehicle maker Tesla bought a 9.2 per cent passive stake in the social media company, to become its single largest shareholder.
Musk will “serve as a Class II director with a term expiring at the company’s 2024 annual meeting of stockholders,” Twitter said, in a Securities and Exchange Commission filing before markets opening on Tuesday in the US.
“For so long as Mr Musk is serving on the board and for 90 days thereafter, Mr Musk will not, either alone or as a member of a group, become the beneficial owner of more than 14.9 per cent of the company’s common stock outstanding at such time, including for these purposes economic exposure through derivative securities, swaps, or hedging transactions,” the statement said.
Elon Musk has made a “best and final” offer to buy Twitter Inc, saying the company has extraordinary potential and he will unlock it. The world’s richest man will pay $54.20 per share in cash, representing a 54 per cent premium over the January 28 closing price and a value of about $43 billion.
"I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy," Musk said in his filing.
Musk said he believes Twitter “will neither thrive nor serve societal imperative in its current form. Twitter needs to be transformed as a private company.”
“If the deal doesn’t work, given that I don’t have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder."
The microblogging platform responded saying: “Twitter Confirms Receipt of Unsolicited, Non-Binding Proposal from Elon Musk. Twitter Inc has confirmed it has received an unsolicited, non-binding proposal from Elon Musk to acquire all of the Company's outstanding common stock for $54.20 per share in cash. The Twitter Board of Directors will carefully review the proposal to determine the course of action that it believes is in the best interest of the company and all Twitter stockholders.
Musk has hired Morgan Stanley as his adviser for the takeover. The offer price also includes the number 420, widely recognized as a coded reference to marijuana. He also picked $420 as the share price for possibly taking Tesla private in 2018, a move that brought him scrutiny from the SEC.
Musk’s 81 million Twitter followers make him one of the most popular figures on the platform, rivaling pop stars like Ariana Grande and Lady Gaga. But his prolific tweeting has sometimes gotten him into trouble with the SEC and others.