Company agrees to billionaire’s $54.20-per-share offer
Twitter’s board of directors has approved Elon Musk’s offer to purchase the social media firm and take it private in a transaction valued at about $44 billion, the company announced on April 25.
The company accepted the billionaire entrepreneur’s proposal of $54.20 per share in cash.
“Twitter has a purpose and relevance that impacts the entire world. Deeply proud of our teams and inspired by the work that has never been more important,” CEO Parag Agrawal said in a company statement.
Musk said in a statement: “Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated. I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential—I look forward to working with the company and the community of users to unlock it.”
It’s been a roller coaster ride since Musk first acquired a 9.2 percent stake in the tech company earlier this month. From rejecting a seat on the company’s board to multiple Twitter polls sponsored by the billionaire CEO, there have been many twists and turns in recent weeks.
Twitter shares rallied more than 5 percent on the news, topping $51 a share. Shares are up nearly 30 percent since April 4 when Twitter confirmed that Musk had acquired a significant stake in the company.
The board members initially resisted Musk’s offer by adopting a “poison pill” defense to prevent a hostile takeover.
The agreement came after Musk confirmed last week that he had secured $46.5 billion in funding commitments to finance the takeover. This included $25.5 billion in debt financing through Morgan Stanley and other financial firms.
Musk plans to take the company private when the transaction is completed. The deal is expected to finalize this year. Goldman Sachs, J.P. Morgan, and Allen & Co. are working as financial advisers to Twitter, while Morgan Stanley is serving as lead financial adviser to Musk.
The Elon Musk List of Changes
The primary objective behind Musk’s takeover crusade has been to advance the cause of free speech on the social media outlet. Musk has described himself as a “free speech absolutist” and referred to the website as “a de facto public town square.”
“I hope that even my worst critics remain on Twitter, because that is what free speech means,” Musk wrote on Twitter just before the deal was announced.
“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,” he stated, according to a Securities and Exchange Commission (SEC) filing.
“However, 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 revealed his reluctance about permanent bans, preferring to install “time-outs.” Or if a controversial tweet is posted, Musk wants to “let the tweet exist.”
In March, he suggested that Twitter’s algorithm should be open-source, with code posted on Github to spot mistakes or recommend adjustments. Musk later suggested that users should have the tools to learn if their posts are promoted or demoted without any kind of behind-the-scenes manipulation.
“Having a black-box algorithm promote some things and not other things, I think this can be quite dangerous,” Musk said during an interview at a TED Conference in Vancouver last week.
For years, Twitter users have been clamoring for an edit button on the digital platform.
Musk spotlighted the concept again in an April 4 Twitter poll, asking his users, “Do you want an edit button?” More than 4 million people voted, with a majority endorsing the concept.
By Andrew Moran