Elon Musk has offered to buy Twitter for $US54.20 per share to take the company private and “unlock” its potential as a platform for “free speech”.
The bombshell offer — which would work out to $US41.4 billion versus the company’s current market valuation of about $US37 billion — was revealed in an updated Schedule 13D filing with the Securities and Exchange Commission early on Thursday.
Twitter stock jumped an incredible 12 per cent in pre-market trading on Thursday after Musk launched his bid.
Twitter responded to Musk’s move late on Thursday evening, and said: “Twitter, Inc today confirmed it has recieved an unsolicited, non-binding proposal from Elon Musk to acquire all of the Company’s outstanding common stock for $54.20 per share in cash.
“The Twitter Board of Directors will carefully review the proposal to determine the course of action that it believes is in the best interest of the Company and all Twitter stockholders.”
Musk has a net worth of about $US260 billion, according to the Bloomberg Billionaire’s Index.
The Tesla boss earlier this month purchased a 9.2 per cent stake in the social media company worth $US2.89 billion, making him the largest individual shareholder.
Twitter chief executive Parag Agrawal revealed this week Musk had declined an offer to join the board – a move that would have prevented him from acquiring more than 14.9 per cent of the company’s shares – sparking takeover speculation.
“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 said in a letter to Twitter’s board.
“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.
Elon Musk says Twitter needs to be taken private. Picture: Lionel Bonaventure/AFP
“As a result, I am offering to buy 100 per cent of Twitter for $US54.20 per share in cash, a 54 per cent premium over the day before I began investing in Twitter and a 38 per cent 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.”
Market analyst Adam Crisafulli of Vital Knowledge said the $US54.20 offer was “too low” for shareholders or the board to accept, noting the shares hit $US70 less than a year ago, Bloomberg reported.
Musk, who has become one of Twitter’s most powerful users with his posts regularly causing wild swings in stocks and cryptocurrency markets, has emerged as a vocal critic of the platform’s business practices and in particular its content moderation policies.
Since taking a major stake, Musk has needled Twitter and its employees with a series of provocative posts, reportedly creating major anxiety within the company and prompting executives to grant staff a scheduled “day of rest”.
Musk said ‘Twitter needs to be transformed as a private company’.
In one, he created a poll asking if Twitter’s San Francisco headquarters should be converted into a “homeless shelter since no one shows up anyway”.
More than 91 per cent of respondents, or 1.9 million people selected “yes”.
He also approvingly shared a video of legendary activist investor Carl Icahn telling a story about how he “fired 12 floors of people” after taking over a company early in his career.
His takeover offer contains the number 420, a reference to marijuana.
Musk previously landed in hot water with the securities regulator for an infamous 2018 tweet in which he claimed he had “funding secured” to take Tesla private at US$420 a share.
Twitter offered Musk a seat on its board on the condition that he not own more than 14.9% of the company’s outstanding stock, according to a filing. But he said five days later that he’d declined.
The decision coincided with a barrage of now-deleted tweets from Musk proposing major changes to the company, such as dropping ads — its chief source of revenue — and transforming its San Francisco headquarters into a homeless shelter.
Musk left a few clues on Twitter about his thinking, such as by “liking” a tweet that summarized the events as Musk going from “largest shareholder for Free Speech” to being “told to play nice and not speak freely.”
