Elon Musk, the controversial billionaire investor and entrepreneur, has made an offer to buy all of social media group Twitter for $43 billion, according to a filing made Thursday morning.
Twitter declined immediate comment on the offer beyond its terse statement after the news broke that Musk was offering an all-cash deal that works out to $54.20 a share. Twitter shares closed at $45.85 on Wednesday. The stock is up 5% for the year to date but has up and down in recent days amid Musk’s activity around the stock. Twitter confirmed it has received an “unsolicited, non-binding proposal” from Musk.
“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,” the company said.
The hostile takeover approach comes just days after the Tesla pioneer revealed that he had bought a 9% stake in the company and followed that by announcing that he would join its board of directors.
That quickly proved unpopular and Musk and the board did a U-turn, announcing it for the best that Musk would not form part of the boardroom. On Wednesday, it emerged that some Twitter shareholders were planning to launch a federal lawsuit against Musk, arguing that he had not disclosed his stake-building quickly enough.
Musk, who has a net worth of some $260 billion according to Bloomberg News, which would make him the world’s richest person, is making a cash offering of $54.20 per share. That is a 54% premium to the stock’s overnight close. Musk is being advised by investment bank Morgan Stanley.
Musk says that Twitter has extraordinary potential that it has failed to unlock and that it would be more successfully run as a private company. Musk is among the most popular Twitter users with more than 81.6 million followers. He’s tangled with the U.S. Securities and Exchange Commission for violating disclosure rules for public companies with his tendency to tweet significant news about his businesses including electric carmaker Tesla and space exploration firm SpaceX.
Not surprisingly, Musk used the social platform to announce his takeover effort. “I made an offer,” he wrote in a message that included a link to the SEC filing of his bid.
I made an offer https://t.co/VvreuPMeLu
— Elon Musk (@elonmusk) April 14, 2022
Musk’s detailed criticisms of Twitter have included suggestions of an edit button and a different layer of verification for premium users. He has also said that Twitter does not have enough premium users as many celebrities are no longer active users of the platform.
“If the deal doesn’t work, given that I don’t have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder,” said Musk in a letter to the company’s current board.
He explained too: “[Twitter] will neither thrive nor serve [its free speech] societal imperative in its current form. Twitter needs to be transformed as a private company.”
