Elon Musk has made a “best and final” offer to buy Twitter, saying the company has extraordinary potential and he is the person to unlock it.
The Tesla CEO and the world’s richest person will offer $54.20 per share in cash, representing a 54 percent premium over the Jan. 28 closing price and a value of about $43 billion. The social media company’s shares soared 11 percent in pre-market trading.
Twitter confirmed it has received the unsolicited, non-binding proposal from Musk, saying in a release that its board would “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, 50, announced the offer in a filing with the U.S. Securities and Exchange Commission on Thursday, after turning down a potential board seat at the company. The billionaire first disclosed a stake of about 9 percent on April 4. Tesla shares fell about 1.5 percent in pre-market trading on the news.
The bid is the latest saga in Musk’s volatile relationship with Twitter.
The executive is one of the platform’s most-watched firebrands, often tweeting out memes and taunts to @elonmusk’s more than 80 million followers. He has been outspoken about changes he would like to consider imposing at the social media platform, and the company offered him a seat on the board following the announcement of his stake, which made him the largest individual shareholder.
After his stake became public, Musk immediately began appealing to fellow users about prospective moves, from turning Twitter’s San Francisco headquarters into a homeless shelter and adding an edit button for tweets to granting automatic verification marks to premium users. One tweet suggested Twitter might be dying, given that several celebrities with high numbers of followers rarely tweet.
Unsatisfied with the influence that comes with being Twitter’s largest investor, he has now launched a full takeover, one of the few individuals who can afford it outright. He’s currently worth about $260 billion according to the Bloomberg Billionaire’s Index, compared with Twitter’s market valuation of about $37 billion.
In a letter to Twitter’s board, Musk said he believes Twitter “will neither thrive nor serve [its free speech] societal imperative in its current form. Twitter needs to be transformed as a private company”
The takeover is unlikely to be a drawn-out process.
“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.
Musk informed Twitter’s board over the previous weekend that he thought the company should be taken private, according to today’s statement.
The $54.20 per share offer is “too low” for shareholders or the board to accept, said Vital Knowledge’s Adam Crisafulli in a report, adding that the company’s shares hit $70 less than a year ago.
Musk has hired Morgan Stanley as his adviser for the takeover. The offer price also includes the number 420, widely recognized as a coded reference to marijuana. He also picked $420 as the share price for possibly taking Tesla private in 2018, a move that brought him scrutiny from the SEC.