After weeks of speculation on the future of Twitter, the world’s richest man Elon Musk has reached a $44 billion deal to buy out the social media platform. Shareholders and regulators will still need to weigh in before the deal is completed, but it is expected to close sometime this year.
Musk has offered to purchase the company at $54.20 a share, a 38 per cent premium to the company’s closing stock price on 1 April. In a Securities and Exchange Commission (SEC) filing earlier this month, he announced commitments for $46.5 billion towards the deal, including $21 billion in equity financing and $25.5 billion in debt financing through Barclays, Bank of America, Morgan Stanley, and other financial institutions.
The tech entrepreneur first announced plans to take over Twitter on 14 April. Shortly after, Twitter’s board enacted an anti-takeover measure called a poison pill, giving certain shareholders the right to purchase more stock.
The social media platform has now entered into a definitive agreement to be acquired by an entity wholly owned by Elon Musk and will become a privately held company upon completion of the transaction.
“The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing,” said Bret Taylor, Twitter’s Independent Board Chair. “The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”
As neither of Musk’s other companies Tesla and Space Exploration Technologies (SpaceX), are social media platforms, it is unlikely that antitrust concerns will come up during the review of the deal by regulatory bodies.
In a statement posted to Twitter, Musk announced his plans to “make Twitter better than ever” with this deal.
“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,” he said.
“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.”
He has been outspoken about the need for Twitter to be a privately owned company to strengthen free speech and build user trust. Speculations are already rife on whether this move towards free speech will allow former US President Donald Trump back on Twitter after he was banned in 2021 for inciting unrest at the US Capitol. So far, Trump has indicated he will not return.
Moreover, significant leadership changes are likely after Musk’s numerous comments on Twitter’s poor leadership in the past.
Commenting on the deal, Twitter’s CEO Parag Agrawal said he was “deeply proud” of the team’s work so far.
“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,” he stated.
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