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Elon Musk has made an offer to buy Twitter with a bid that values the company at $43.4 billion (€39 billion), vowing to “unlock” the potential of the social media platform by taking it private.
Musk’s offer of $54.20 a share comes days after he took a 9 per cent stake in the company, becoming its largest shareholder but rejecting an invitation to join its board.
The move would transform the tech entrepreneur into a new media baron, able to set the future direction of a platform where he has 80 million followers and through which he has pursued personal vendettas and promoted his agenda.
The entrepreneur announced the offer on Thursday in a filing with the US Securities and Exchange Commission (SEC).
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In a letter to the company’s board, attached to the filing, Mr Musk said he had invested in the platform, of which he is an enthusiastic user, because he believed in its potential to be “the platform for free speech around the globe”.
However, he added that, since making his investment he now realised the company would “neither thrive nor serve this societal imperative in its current form”.
“Twitter needs to be transformed as a private company,” he wrote.
He said his offer represented a 54 per cent premium over the day he began investing in the company and a 38 per cent premium to April 1st, three days before his stake building became public.
However, he hinted that he could walk away if the deal fell through.
“My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder,” Mr Musk wrote. “Twitter has extraordinary potential. I will unlock it.”
Shares in Twitter rose about 2 per cent in the first hour of trading, to $46.80.
Twitter said its board “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”.
In a tweet, Saudi business tycoon Prince Alwaleed bin Talal said that as one of Twitter’s biggest long-term shareholders, he rejected Musk’s takeover bid. The prince added that he did not believe the offer “comes close to the intrinsic value of Twitter given its growth prospects”.
Report his stake
Mr Musk acquired his shares on March 14th but did not publicly report the stake until April 4th, exceeding the 10-day limit that federal trade laws require investors to notify the SEC.
After the news broke of Mr Musk becoming one of Twitter’s largest shareholders, Twitter’s shares rose 27 per cent. A day later, Twitter chief executive Parag Agrawal announced that Mr Musk would be joining its board of directors and shares rose again to $50.98.
Mr Musk confirmed this week he would not be joining the board, after all, having spent the weekend critiquing the platform and suggesting new features, in a series of tweets that have since been deleted.
One tweet that Mr Musk has “liked” on the platform suggested that Elon “became the largest shareholder for Free Speech” and “told to play nice and not speak freely”. – Copyright The Financial Times Limited 2022
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