Elon Musk has made a “best and final” offer to buy Twitter, saying the company has extraordinary potential and he will unlock it.
The world’s richest man will pay $US54.20 a share in cash, representing a 54 per cent premium over the January 28 closing price and a value of about $US43 billion ($57.7 billion). The social media company’s shares soared 18 per cent.
In a letter to Twitter’s board, Elon Musk said the company “needs to be transformed”.Credit:AP
Musk, 50, announced the offer in a filing with the US Securities and Exchange Commission on Thursday. The billionaire, who also controls Tesla, first disclosed a stake of about 9 per cent on April 4.
The executive is one of Twitter’s most-watched firebrands, often tweeting out memes and taunts to @elonmusk’s more than 80 million followers. He has been outspoken about changes he’d like to consider imposing at the social media platform, and the company offered him a seat on the board following the announcement of his stake, which made him the largest individual shareholder.
After his stake became public, Musk immediately began appealing to fellow users about prospective moves, from turning Twitter’s San Francisco headquarters into a homeless shelter and adding an edit button for tweets to granting automatic verification marks to premium users. One tweet suggested Twitter might be dying, given that several celebrities with high numbers of followers rarely tweet.
Musk is currently worth about $US260 billion according to the Bloomberg Billionaires Index, compared with Twitter’s market valuation of about $US37 billion.
In a letter to Twitter’s board, Musk said he believes Twitter “will neither thrive nor serve [its free speech] societal imperative in its current form. Twitter needs to be transformed as a private company”
The takeover is unlikely to be a drawn out process. “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,” said Musk.
The $US54.20 per share offer is “too low” for shareholders or the board to accept, said Vital Knowledge’s Adam Crisafulli in a report, adding that the company’s shares hit $US70 less than a year ago.
Musk has hired Morgan Stanley as his adviser for the takeover. The offer price also includes the number 420, widely recognised as a coded reference to marijuana. He also picked $US420 as the share price for possibly taking Tesla private in 2018, a move that brought him scrutiny from the SEC.
Bloomberg
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