Elon Musk offers to buy Twitter for more than $40bn
Elon Musk has launched an audacious bid to buy Twitter for more than $40bn and release its “extraordinary potential” to boost free speech and democracy across the world.
The Tesla chief executive and world’s richest person revealed in a regulatory filing that he had launched a hostile takeover of Twitter just days after he bought a 9.2% stake. He was subsequently offered a seat on the social media company’s board but in a last-minute twist refused to take up the position.
In a letter to Bret Taylor, Twitter’s chair, Musk said the site was not thriving as a company or a tool for improving freedom of speech, and “needs to be transformed as a private company”.
In the US Securities and Exchange Commission (SEC) filing on Thursday, Musk said he had offered to buy all Twitter’s shares for $54.20 each – a total of $41.4bn (£31.5bn) based on 763.58m shares outstanding, according to data from the financial information provider Refinitiv.
That share offer price would be a 54% premium to Twitter’s closing price on 28 January, the day before he started buying up his stake.
Twitter shares jumped 11% in pre-market trading on Thursday to $50.90 on news of the offer.
“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,” Musk wrote in the letter to Taylor.
“However, since making my investment I now realise 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.”
With an estimated $274bn fortune, Musk is one of very few people with enough ready money to be able to fund a private purchase of Twitter. He has hired the investment bank and financial services firm Morgan Stanley to advise him on the takeover offer.
The $54.20 offer price includes the number 420 – in what appears to be a reference to the number used as code for cannabis. When Musk offered to take his electric carmaker Tesla private in 2018 he offered to buy the shares he did not already own for $420 a share, saying he had “funding secured” for the deal.
In 2018 Musk sparked concern by smoking marijuana on a live web showwhile he was under investigation by the SEC for the “take private” tweet. The SEC found against him over the tweet and Musk agreed to submit his public statements about the company’s finances to vetting by its legal counsel. However, he was later found to have violated this settlement and eventually agreed to step down as Tesla’s chair, appoint additional independent director and agreed to pay $40m in penalties.