NEW YORK: Elon Musk has made a “best and final” offer to buy Twitter Inc., saying the company has extraordinary potential and he is the person to unlock it.
The world’s richest person will offer US$54.20 per share in cash, representing a 54% premium over the Jan. 28 closing price and a value of about $43 billion. The social media company’s shares soared 18% in pre-market trading.
Musk, 50, announced the offer in a filing with the US Securities and Exchange Commission on Thursday, after turning down a potential board seat at the company. The billionaire, who also controls Tesla Inc, first disclosed a stake of about 9% on April 4. Tesla shares fell about 1.5% in pre-market trading on the news.
The bid is the latest saga in Musk’s volatile relationship with Twitter. The executive is one of the platform’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. Unsatisfied with the influence that comes with being Twitter’s largest investor, he has now launched a full takeover, one of the few individuals who can afford it outright.
He’s currently worth about $260 billion according to the Bloomberg Billionaire’s Index, compared with Twitter’s market valuation of about $37 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.
Musk informed Twitter’s board over the previous weekend that he thought the company should be taken private, according to today’s statement. The $54.20 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 $70 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 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 sent the following formal letter to Bret Taylor, chairman of Twitter's board:
"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. "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.
"As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter and a 38% premium over the day before my investment was publicly announced. My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder. Twitter has extraordinary potential. I will unlock it."
