Elon Musk speaks at the World Auto News Conference at the Renaissance Center in Detroit, Michigan, January 13, 2015. REUTERS/Rebecca Cook/File Photo
Register now to get free unlimited access to Reuters.com
April 14 (Reuters) – Elon Musk has offered to buy Twitter (TWTR.N) for about $41 billion in cash, saying that the social media company he has often criticized must go private to see effective changes.
Musk’s $54.20 per share price, disclosed in a regulatory filing on Thursday, represents a 38% premium to Twitter’s April 1 closing, the last trading day before Tesla (TSLA.O) The CEO’s stake of more than 9% in the company has been announced.
The billionaire turned down an offer to join Twitter’s board earlier this week after revealing his stake in the company, a move analysts said indicated his intention to take over the company because a seat on the board would have limited his stake to less than 15%. Read more
Register now to get free unlimited access to Reuters.com
“Since I made my investment, I now realize that the company will not thrive and will not serve this societal necessity in its current form. Twitter needs to transform into a private company,” Musk said in a letter to Twitter Chairman Brett Taylor.
Musk, who calls himself an absolute freedom of expression, has criticized the social media platform and its policies, and recently conducted a survey on Twitter asking users if they think the platform adheres to the principle of free speech.
“My offer is my final best offer, and if it is not accepted, I will need to reconsider my position as a shareholder,” Musk added.
A source told Reuters that Twitter will review Musk’s bid with advice from Goldman Sachs & Co., Wilson Soncini Goodrich & Rosati.
Shares of the company jumped 12% in pre-market trading, while Tesla shares fell about 1%. According to Refinitiv data, the total value of the transaction was calculated based on 763.58 million shares outstanding.
Musk has amassed more than 80 million followers since joining the site in 2009 and has used the platform to make several announcements, including teasing a special deal for Tesla that got him in trouble with regulators.
He has also been sued by former Twitter shareholders who claim they missed the recent surge in his share price because he waited too long to reveal his stake. Read more
Less-than-expected Twitter user additions in recent months have cast doubt on its growth prospects, even as it pursues big projects like voice chat rooms and newsletters to end a long-running recession.
“It will be difficult for any of the other bidders/consortium to emerge, and will likely force the Twitter board to accept this offer and/or operate an active Twitter sale,” Daniel Ives, an analyst at Wedbush Securities, wrote in a client note.
“There will be a host of questions about financing, regulation, and balancing Musk’s time (Tesla and SpaceX) in the coming days, but based on that submission, it’s now an offer for Twitter or never to accept it,” Ives said.
Musk said Morgan Stanley was the show’s financial advisor.
“Twitter has extraordinary potential,” Musk said in his message. “I’m going to unlock it.”
Register now to get free unlimited access to Reuters.com
(Report) Submitted by Shafi Mehta, Uday Sampath and Greg Rumiliotis; Editing by Anil de Silva
Our criteria: Thomson Reuters Trust Principles.
“Infuriatingly humble alcohol fanatic. Unapologetic beer practitioner. Analyst.”