New Delhi: Tesla Chief Executive Officer (CEO) and billionaire Elon Musk has offered to buy Twitter for $54.20 per share in cash, representing a 54 per cent premium over the January 28 closing price and a value of about $43 billion, according to a report by Bloomberg.
Musk announced the offer in a filing with the US Securities and Exchange Commission (SEC) on Thursday. As soon as the news got public, the shares of the social media company soared 18 per cent in pre-market trading.
After launching the hostile takeover, Musk said, “Twitter has extraordinary potential, I will unlock it.”
According to agency news, Musk, in a letter to Twitter Chairman Bret Taylor, said, “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. My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder.”
50-year-old Musk, who also controls Tesla Inc, first disclosed a stake of about 9 per cent on April 4. However, he later decided not to join Twitter’s board of directors.
Musk, who has over 8 crore followers on Twitter since joining in 2009, has used the platform to make several announcements, including teasing a go-private deal for Tesla that landed him in regulatory scrutiny.
The Tesla CEO has been completely outspoken about changes he’d like to see in the platform. He said, “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.”
The company also offered him a seat on the board following the announcement of his stake, which made him the largest individual shareholder. Musk said he had abandoned a plan to join Twitter’s board, just as his tenure was about to start. Taking the board seat would have prevented him from a possible takeover of the company.
He has hired Morgan Stanley as his adviser for the takeover. The offer price also includes the number 420, widely recognised 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.
Bloomberg said that 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.
According to the Bloomberg Billionaire’s Index, Musk is currently worth about $260 billion, compared with Twitter’s market valuation of about $37 billion.