- The world’s richest man, 50, agreed to pay shareholders $54.20 in cash for each share of their common stock
- The move shifts control of the social media platform populated by millions of users to the world’s richest man
- The Tesla magnate vowed to protect free speech online, ‘defeat the spam bots’ and ‘authenticate all humans’
- He said he would ‘enhance the product with new features’ and ‘make algorithms open source to increase trust’
- Parag Agrawal said he was ‘proud of our teams and inspired by the work that has never been more important’
- Chair Bret Taylor said the board ‘conducted thoughtful and comprehensive process to assess Elon’s proposal’
Elon Musk has seized control of Twitter for $44billion as weeks of rollercoaster negotiations finally came to a close this afternoon.
The Tesla magnate agreed to pay shareholders $54.20 in cash for each share of common stock before the bombshell deal was struck.
The move shifts control of the social media platform populated by millions of users and global leaders to the world’s richest person.
Musk vowed to protect free speech on Twitter, ‘defeat the spam bots’ and ‘authenticate all humans’ as he welcomed the acquisition.
He also revealed he planned to ‘enhance the product with new features’ and ‘make the algorithms open source to increase trust’.
And earlier the 50-year-old tycoon called for his ‘worst critics’ to remain on the platform because ‘that is what free speech means’.
But despite recent speculation former President Donald Trump said he would not be rejoining the site if Musk allowed him to – instead saying he would continue to use his own TRUTH Social.
Twitter CEO Parag Agrawal said he was ‘proud of our teams and inspired by the work that has never been more important’ after the new broke.
Chairman Bret Taylor said ‘we believe it is the best path forward for stockholders’ and added the board had ‘conducted a thoughtful and comprehensive process to assess Elon’s proposal’.
The deal brings to an end one of the most dramatic takeover bids in history and sent shockwaves through the world of business.
The Tesla magnate, 50, agreed to pay shareholders $54.20 in cash for each share of common stock before the bombshell deal was struck
Twitter released a statement saying it had agreed with Musk for him to buy the social media giant for $54.20 per share in cash – working out as about $44billion in total.
It means the company will be taken private when the transaction is completed.
Under the terms of the agreement, stockholders will receive $54.20 in cash for each share of common stock they owned when the deal was struck.
It represents a 38 per cent premium to Twitter’s closing stock price on April 1 – the last trading day before Musk said he had taken on a 9 per cent stake.
Musk said: ‘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.’
Taylor said: ‘The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing.
‘The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.’
Agrawal said: ‘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.’
Ahead of the announcement, Musk called for his ‘worst critics’ to remain on the social media site on Monday morning.
The billionaire said he wanted them to keep using the platform because ‘that is what free speech means’ as talks of a deal for him to take over entered their final stages.
He tweeted earlier today: ‘I hope that even my worst critics remain on Twitter, because that is what free speech means.’ Earlier, in a cryptic post on his official account, he also wrote: ‘And be my love in the rain.’
The tycoon’s representatives were earlier today said to be hammering out last-minute terms including a timeline and fees if an agreement was signed and then fell apart.
The two sides were reportedly working into the early morning to finalize the ‘fluid and fast-moving’ negotiations for a deal.
His team and Twitter had met to discuss what was a prospective $43billion sale on Sunday, with the Wall Street Journal reporting progress had been made.
It remains unclear whether Musk himself attended those talks in person. These were two days after he met with actively-managed funds which hold shares in Twitter.
The paper had said there were still issues to hash out after Sunday’s meeting, and there had been no guarantee a final deal would be reached.
Dan Ives, an analyst at Wedbush Securities, told the New York Times the deal could be ‘the beginning of the end for Twitter as a public company with Musk likely now on a path to acquire the company unless a second bidder comes into the mix’.
Others had suggested Twitter would only approve a deal valuing it at over $60 per share, having slumped from $70 last year to around $48 this year.
Bosses rebuffed Musk’s initial April 14 offer after he did not offer information on how he would buy the network. He began to win over shareholders after revealing he had secured financing with the help of Morgan Stanley.
He committed $21 billion in equity, $13 billion from Morgan Stanley in debt facilities and another $12.5 billion from the bank and others in margin loans.
Twitter’s share price rocketed since news of Musk’s purchase of 9.2 per cent of the firm and initial offer, from around $39-a-share to $48.93 when the markets closed.
Musk has been meeting with Twitter shareholders in the last few days, seeking support for his bid. He said Twitter needs to be taken private to grow and become a genuine platform for free speech.
Earlier Sunday, Musk tweeted he was ‘moving on’ to his more than 83million followers, leaving many in the lurch as to what he was moving on from.
But he later clarified it was in reference to ‘making fun of [Bill] Gates for shorting Tesla while claiming to support climate change action’.
Many Twitter shareholders reached out to the firm after Musk outlined a detailed financing plan for his bid on Thursday and urged it not to let a deal slip away.
Musk’s insistence his bid for Twitter was his ‘best and final’ had emerged as a hurdle in the deal negotiations, sources said.
But Twitter’s board decided to engage with him to gather more information on his ability to complete the deal and potentially get better terms, the sources added.
Twitter wanted to know more about any active investigations by regulators into Musk, including by the US Securities and Exchange Commission, sources said.
Securities lawyers say Musk, who settled charges he misled investors four years ago, may have breached SEC disclosure rules as he amassed a stake in Twitter this year.
Twitter was also looking into whether regulators in any of the major markets it operates would have objected to Musk owning the company, the source added.
Were Twitter to have found a sale to Musk would be risky, it could have asked for a sizeable break-up fee, according to the sources.
The social media company adopted a poison pill after Musk made his offer to prevent him from raising his more than nine per cent stake in the company above 15 per cent without negotiating a deal with its board.
In response, Musk threatened to launch a tender offer he could use to register Twitter shareholder support for his bid.
Twitter’s board weighed concerns that unless it sought to negotiate a deal with Musk, many shareholders could have back him in a tender offer, the sources said.
While the poison pill would have prevented Twitter shareholders from tendering their shares, the company was worried its negotiating hand would have weakened considerably if it was shown to be going against the will of many of its investors, the insiders added.
The Wall Street Journal reported earlier on Sunday Musk and Twitter had met to discuss the acquisition offer.
The price expectations among Twitter shareholders for the deal diverge largely based on their investment strategy, the sources said.
Active long-term shareholders, who together with index funds hold the biggest chunk of Twitter shares, had higher price expectations, some in the $60s-per-share, the sources said.
They were also more inclined to give Agrawal, who became Twitter’s chief executive in November, more time to boost the value of the company’s stock, the sources added.
‘I don’t believe that the proposed offer by Elon Musk ($54.20 per share) comes close to the intrinsic value of Twitter given its growth prospects,’ Saudi Arabia’s Prince Alwaleed bin Talal, a Twitter shareholder, tweeted on April 14.
Short term-minded investors such as hedge funds wanted Twitter to accept Musk’s offer or ask for only a small increase, the sources said.
Some of these were fretting a recent plunge in the value of tech stocks amid concerns over inflation and an economic slowdown made it unlikely Twitter would be able to deliver more value for itself anytime soon, the sources added.
Sahm Adrangi, portfolio manager at Kerrisdale Capital Management, a hedge fund that owns 1.13 million shares in Twitter, or 0.15 per cent of the company, said: ‘I would say, take the $54.20 a share and be done with it.’
One silver lining for Twitter’s board is Musk’s offer did not appear to convert much of his army of 83million followers into new shareholders in the firm, the sources said.
Twitter’s retail investor base has increased from about 20 per cent before Musk unveiled his stake on April 4 to some 22 per cent.