You, too, can mold a transformative social platform into the image you have for it. All you need is roughly $44 billion.
Twitter said Monday that it officially entered into an agreement to be acquired by an entity wholly owned by mega-entrepreneur Elon Musk, with the transaction valued at approximately $44 billion, or $54.20 per share in cash.
Once the deal closes, Twitter will become a privately held company.
Shareholders in Twitter will receive $54.20 in cash for each share of common stock they own, which the company said marks a 38% premium over its closing price April 1, the last trading day before Musk revealed his purchase of a 9.2% stake in Twitter.
The stock closed trading Monday at $51.70 per share, up 5.66% from last Friday’s closing price.
Twitter’s board of directors unanimously approved the transaction, which the company expects to close sometime this year pending the approval of Twitter stockholders, the receipt of applicable regulatory approvals and the satisfaction of other customary closing conditions.
Musk secured $25.5 billion of fully committed debt and margin loan financing, and he is providing an equity commitment of approximately $21 billion. The company said there are no financing conditions to the closing of the transaction.
Twitter will release its first-quarter-2022 financial results before the market opens Thursday (April 28), but there will be no accompanying conference call due to the transaction.
News broke April 4 that Musk filed a Schedule 13G form with the Securities and Exchange Commission March 14, declaring his purchase of 73,486,938 Twitter shares
On March 26, 12 days after the share purchase, Musk responded to a tweet from machine learning engineer Pranay Pathole asking whether he would consider building a new social media platform with an open-source algorithm and priority on free speech with, “Am giving serious thought to this.”
He also tweeted that day, “Given that Twitter serves as the de facto public town square, failing to adhere to free-speech principles fundamentally undermines democracy. What should be done?”
Twitter CEO Parag Agrawal revealed in a tweet April 5 that Musk would join the company’s board of directors, and Twitter said in a Form 8-K filed with the SEC that as part of the agreement between the two parties, “For so long as Musk is serving on the board and for 90 days thereafter, Musk will not, either alone or as a member of a group, become the beneficial owner of more than 14.9% of the company’s common stock outstanding at such time, including for these purposes economic exposure through derivative securities, swaps or hedging transactions.”
Musk informed Agrawal April 9 that he would, in fact, not be joining the board, and the social network’s CEO tweeted the following day, “The board and I had many discussions about Elon joining the board, and with Elon directly. We were excited to collaborate and clear about the risks. We also believed that having Elon as a fiduciary of the company where he, like all board members, has to act in the best interests of the company and all our shareholders was the best path forward. The board offered him a seat.”
He continued, “We announced on Tuesday that Elon would be appointed to the board contingent on a background check and formal acceptance. Elon’s appointment to the board was to become officially effective April 9, but Elon shared that same morning that he will no longer be joining the board. I believe this is for the best. We have and will always value input from our shareholders, whether they are on our board or not. Elon is our biggest shareholder and we will remain open to his input.”
Musk said in a statement Monday, “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.”
Agrawal added, “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.”
And Twitter independent board chair Bret 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.”
