Elon Musk secured an agreement to purchase Twitter for approximately $44 billion on Monday following a night of negotiations with the social media company’s 11 board members.
The deal, one of the biggest-ever leveraged buyouts of a listed company, arrives less than two weeks after Musk put forward his initial bid of roughly $54.20 per share—a 38 percent premium over Twitter’s closing stock price on the last trading day before Musk disclosed his 9% stake in the company—in an April 14 filing with the U.S. Securities and Exchange Commission. Reports surfaced Monday morning that despite originally adopting a “poison pill” defense against Musk’s unsolicited offer, Twitter’s board began seriously considering the proposal after Musk was able to obtain commitments for $46.5 billion in financing that included backing from Morgan Stanley and other institutions as well as $21 billion of his own equity. In addition to controlling Tesla Inc., Musk was already Twitter’s largest individual shareholder.
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Now, the world’s richest man is set to take Twitter private. Twitter’s stock opened 4% higher on Monday, at about $51 a share, as the two sides closed in on a deal. Musk stated in a live TED interview that he will try to retain as many shareholders legally allowed for a private business, typically 500. The company now has 1,700 shareholders, both individual and institutional.
According to the agreement, Twitter stockholders would receive $54.20 for every share of Twitter Common Stock they hold upon completion of the proposed transaction. As soon as the transaction is completed, the company becomes privately owned.
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How Twitter will ultimately transform under Musk’s leadership remains unclear. Musk, the billionaire Tesla CEO, has already made certain of his overall goals for the company clear. Musk has called himself a “free speech absolutist” and insinuated that he will do away with some portion of Twitter’s content moderation policies, which protect against hate speech, incitements of violence, and targeted harassment, among other things. Musk has also pledged to introduce an edit button to Twitter and expressed a desire to make the site’s algorithm more transparent.
Musk sent this message hours before his acquisition was officially announced:
“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 of the deal. “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.”
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