Elon Musk Pulls It Off: Twitter Board Accepts Tesla CEO’s Buyout Offer
Twitter (NYSE:TWTR), one of the most prominent social media platforms, is about to become a part of Elon Musk’s expanding business empire.
[RTRS] 25 Apr - 20:50:03 (TWTR.N) - ELON MUSK TO ACQUIRE TWITTER
— *Walter Bloomberg (@DeItaone) April 25, 2022
As per the details revealed just moments ago, Musk will acquire Twitter at $54.20 per share, equating to an offer of around $44 billion. The press statement notes:
"Under the terms of the agreement, Twitter stockholders will receive $54.20 in cash for each share of Twitter common stock that they own upon closing of the proposed transaction. The purchase price represents a 38% premium to Twitter's closing stock price on April 1, 2022, which was the last trading day before Mr. Musk disclosed his approximately 9% stake in Twitter."
Moreover, the transaction is expected to close in 2022:
"The transaction, which has been unanimously approved by the Twitter Board of Directors, is expected to close in 2022, subject to the approval of Twitter stockholders, the receipt of applicable regulatory approvals and the satisfaction of other customary closing conditions.
Mr. Musk has secured $25.5 billion of fully committed debt and margin loan financing and is providing an approximately $21.0 billion equity commitment."
As we’ve covered expansively over the past few days, this saga began in early April when Musk disclosed a 9.2 percent passive stake in Twitter. That disclosure then prompted Parag Agrawal, the CEO of the social media giant, to offer Musk a seat at his company's board. However, Musk declined to become a part of Twitter’s board, as the offer entailed a condition that prevented the CEO of Tesla from increasing his stake in Twitter to beyond 15 percent, predictably unleashing speculation that Musk was gunning for the entire company.
Just a few days after these dramatic events, Musk officially unveiled his offer to take Twitter private at $54.20 per share, equating to a price tag of over $43 billion. Musk also penned a public letter to the comapny's board, noting:
"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.”
In response, the social media giant's board members adopted a stringent poison pill measure that would activate once any entity or a group of investors managed to garner an “unauthorized” stake in the company of 15 percent or more. Once activated, the measure would have made it difficult for Musk to push through his takeover bid in a coercive manner.
As this tit-for-tat between Musk and the Twitter board continued, the CEO of Tesla finally landed a major blow over the past weekend when he managed to line up $46.5 billion in financing for his acquisition bid, compelling the social media giant’s board to enter into serious negotiations.