Twitter’s board of directors said Monday afternoon that it has accepted Tesla CEO Elon Musk’s $44 billion offer to buy the company — bringing an end to a weekslong saga and ushering in a new era for the struggling social-media platform.
Musk, who has said he wants to buy Twitter in order to restore the platform’s adherence to free speech principles, will pay $54.20 per share for the company, which he has vowed to take private.
“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk said in a statement.
“I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it.”
“The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders,” Twitter board chair Bret Taylor said.
Trading of Twitter’s stock was halted leading up to the announcement. Twitter shares were trading at $51.98 each ahead of the pause, indicating that investors were uncertain whether the deal would actually go through.
At $44 billion, Musk is paying more than 175 times as much for Twitter as Amazon founder Jeff Bezos paid for the Washington Post in 2013.
Ahead of the announcement, Twitter’s board met on Monday to discuss Musk’s proposal after shareholders warmed to the idea of a takeover. Reuters reported earlier on Monday that Musk wooed investors with the particulars of his proposal, which was initially met with resistance from some of the company’s largest stakeholders.
The board had adopted a “poison pill” defense strategy whereby it offered shareholders an opportunity to buy up more stock at a discount, thus diluting its value in hopes of dissuading Musk from mounting a hostile takeover.
But after Musk secured $46.5 billion in financing, investors pressured the board to seriously consider the offer. Musk and board members negotiated on Sunday and continued discussions into the early hours of Monday morning, according to The New York Times.
Twitter was unable to secure a so-called “go-shop” provision from Musk which would have allowed it to solicit other bids from potential buyers after the deal was signed, it was reported earlier on Monday.
Still, Twitter would be allowed to accept an offer from another party by paying Musk a break-up fee, the sources added.
While the two sides were talking, an agreement was by no means a certainty, particularly after board members raised several potential red flags, including Musk’s ongoing legal battles with the Securities and Exchange Commission.
“The Board got some extra time with the poison pill but ultimately had to get to the negotiation table with Musk to get this deal done,” Wedbush Securities managing director Dan Ives said in a note. “We do not expect any major regulatory hurdles to the deal getting done as this soap opera now ends with Musk owning Twitter.”
Earlier this month, Musk shocked Wall Street when he announced that he had acquired a 9.2% stake in the company.
Days later, however, he turned down an offer to join the board of directors — setting up a showdown that culminated in his hostile takeover bid.
Musk’s acquisition of Twitter has unnerved many of the site’s more liberal users while it has energized pro-Republican voices who want the platform to reinstate former President Donald Trump.
Trump was banned by Twitter and other large social media companies for his role in the Jan. 6, 2021 rioting at the US Capitol.
While Musk has voiced support for less stringent content moderation policies at Twitter, he has not said whether he will allow Trump to return to the platform. Yet Trump himself claims that he won’t return to the platform even if Musk lets him — and instead plans to use his own struggling Twitter alternative TRUTH Social, even though he hasn’t posted on the site since February.
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