Elon Musk has launched a hostile takeover bid to take Twitter private in a $41.39 billion all-cash deal, telling the board chairman in an offer letter: ‘Twitter has extraordinary potential. I will unlock it.’
Twitter confirmed on Thursday that it had received the offer, saying in a statement: ‘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 insisted that his bid was his ‘best and final offer’, adding that ‘if it is not accepted, I would need to reconsider my position as a shareholder,’ a regulatory filing showed.
His offer price of $54.20 per share represents a 38 percent premium to the closing price of Twitter’s stock on April 1, the last trading day before the Tesla CEO publicly revealed his 9.2 percent stake in the company, sending the stock popping.
The offer figure also includes the digits ‘420,’ a reference to marijuana that Musk frequently jokes about.
Musk, who is Twitter’s biggest shareholder, sent his offer letter on Wednesday night, telling the company’s board that ‘it’s a high price and your shareholders will love it’.
Shares of Twitter jumped nearly 12 percent in pre-market trading. The stock is still down from its all-time high of about $73, and Twitter shares spent much of last year above Musk’s offer price. Meanwhile, shares of Tesla, the electric vehicle manufacturer that the SpaceX CEO heads, slipped about 0.9 percent.
In a tweet alongside a link to the Securities and Exchange Commission, the world’s richest man whose net worth is currently $282billion according to Forbes and $100billion richer than Amazon founder Jeff Bezos, simply wrote: ‘I made an offer’.
Outspoken Musk, known for his social media antics, told Bret Taylor, the Chairman of the Board: ‘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.’
Musk continued: ‘As a result, I am offering to buy 100 percent of Twitter for $54.20 per share in cash, a 54 percent premium over the day before I began investing in Twitter and a 38 percent 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.’
Musk added that his offer was not a ‘threat’, but ‘it’s simply not a good investment without the changes that need to be made.’
He continued: ‘And those changes won’t happen without taking the company private.’
He called that price his best and final offer, although the billionaire provided no details on financing. The offer is non-binding and subject to financing and other conditions.
Musk said investment bank Morgan Stanley was the financial adviser for the offer.
The total deal value was calculated based on 763.58million shares outstanding, according to Refinitiv data.
Wedbush analyst Dan Ives called Musk’s offer a ‘historic move’ in a note, adding ‘ultimately we believe this soap opera will end with Musk owning Twitter after this aggressive hostile takeover of the company.’
Ives wrote that it was ‘get out the popcorn time’ and predicted ‘many twists and turns in the weeks ahead as Twitter and Musk walk down this marriage path.’
Earlier this week, Musk rejected an offer to join Twitter’s board after disclosing his stake in the company, a move which analysts said signaled his intention to take over the company as a board seat would have limited his stake to just under 15 percent.
Musk has amassed over 80 million followers since joining the site in 2009 and has used the platform to make several announcements, including teasing a go-private deal for Tesla that landed him in hot water with regulators.