Ending all speculations, Elon Musk has finally made an offer to buy Twitter Inc, the company that runs the microblogging social media platform Twitter. According to reports, the Tesla and SpaceX chief has offered to pay $54.20 per share in cash for 100% shares of the company, valuing the offer at about $43 billion.
The world’s richest man revealed his offer of hostile takeover of the company in a filling made with the U.S. Securities and Exchange Commission on Thursday. Twitter shares rose 18% after the announcement was made.
Elon Musk had earlier revealed that he had acquired 9.2% stake in Twitter, creating speculations that he may take over the company. Due to his stake, he was invited a seat at the board of directors of the company, which he had initially accepted. But later he decided not to join the board.
One of the conditions of his appointment to the board was that he will not be able to increase his stake in the beyond 15%. Now as an independent investor, he is not bound by such restrictions, and has announced his offer to but the entire stock of Twitter.
According a letter written by Musk to Twitter board chairman Bret Taylor making the offer, Musk said that he invested in Twitter as he believes in its potential for free speech around the globe, saying he believes free speech is a societal imperative for a functioning democracy.
“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,” he said in the letter.
Letter: pic.twitter.com/QPz9afA7sg
— db (@tier10k) April 14, 2022
Making his offer, he said, “As a result, I am offering to buy 100% of Twitter for $54.20 per share in case, a 54% premium over the day I began investing in Twitter and a 38% premium over the day before my investment was publicly announced”. He added that his offer is best and final offer and if it is not accepted, he will need to reconsider his position as a shareholder.
He added, “Twitter has extraordinary potential. I will unlock it”.
Later Musk posted a link to the SEC filing on Twitter, saying “I made an offer”.
I made an offer https://t.co/VvreuPMeLu
— Elon Musk (@elonmusk) April 14, 2022
As the world’s richest man, Elon Musk can easily buy 100% shares of Twitter by cash. It has to be seen how the Twitter board and management reacts to his offer. However, if if the board declines, he can purchase all the Twitter shares available in the market, and can gain enough shares to take over the board. Musk has hired Morgan Stanley as his adviser for the takeover.
While Musk’s offer price is above the recent prices of the stock, it is below high prices of the company. Twitter share had hit $77 just last year, therefore, some shareholders may not be willing to sell at $54.20, and thus the bid may fail.
