Elon Musk has launched a takeover bid for Twitter, offering to buy it for $54.20 (Rs 4,136) a share, just weeks after he became the social media company’s largest shareholder.
Musk said this was a “best and final offer”, representing a 54 per cent premium over the day before he began investing in the company in late January, according to a US Securities and Exchange Commission filing. It would value the company at about $43 billion.
In the filing, Musk said “I don’t have confidence in management” and that he couldn’t make the changes he wanted in the public market.
If the offer is not accepted, Musk said, he would “need to reconsider my position as a shareholder”, according to a letter sent to Bret Taylor, Twitter’s chair, on April 13 and enclosed in the filing.
“Twitter has extraordinary potential. I will unlock it.”
Twitter said that it had received Musk’s “unsolicited, nonbinding proposal” to buy the company and take it private.
In a statement, Twitter said its board would review Musk’s Securities and Exchange Commission filing and “determine the course of action that it believes is in the best interest of the company and all Twitter stockholders”.
Twitter shares were 11 per cent higher in pre-market trading. On Wednesday, the closing price was $45.85. Morgan Stanley is Musk’s financial adviser for the bid, according to the filing.
On April 4, a regulatory filing revealed that Musk, the billionaire chief executive of Tesla and SpaceX and the world’s richest man, had bought a 9.2 per cent stake in Twitter. The next day, Twitter announced Musk would join its board but by the end of the week he had rejected the offer.
“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,” Musk said in the letter to Taylor sent on April 13.
“However, since making my investment I now realise the company will neither thrive nor serve this societal imperative in its current form,” he wrote. “Twitter needs to be transformed as a private company.”
Twitter’s share price has climbed 16 per cent since April 1 and since Musk’s investment became public.
In the Securities and Exchange Commission filing that Musk submitted expressing his intent to buy Twitter and make it a private company, he sounded a lot like the activist investor he has become in recent weeks, saying he was not “playing the back-and-forth game”.
Instead, he added, “I have moved straight to the end.”
He continued: “It’s a high price and your shareholders will love it.”
“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,” Musk said in the filing. “This is not a threat, it’s simply not a good investment without the changes that need to be made. And those changes won’t happen without taking the company private.”
New York Times News Service
