Elon Musk Offers To Buy Twitter for ‘Premium’ Price of $54.20 Per Share
In yet another twist in the Musk-Twitter saga, the richest man on the planet has offered to buy Twitter for $54.20 per share in cash, “a 54% premium over the day before I began investing in Twitter and a 38% premium over the day before my investment was publicly announced,” according to a note included in a filing with the Securities and Exchange Commission.
Shortly after the news broke, Twitter confirmed in a press release that it has received an unsolicited, non-binding proposal from Musk to acquire all of the company’s outstanding common stock for $54.20 per share.
Shares of Twitter were up 7.2% in pre-market trading.
“Twitter has extraordinary potential. I will unlock it … My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder,” Musk wrote to Chairman of the Board Bret Taylor in a exhibit that is part of the SEC filing.
“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 wrote. “However, 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.”
In a note sent to GOBankingRates, Wedbush Securities analyst Dan Ives called the move “historic,” with “free speech around the globe” a core focus of Musk’s that has started this “Game of Thrones” with Twitter and its board.
Ives said that while Musk previously had a 9.2% stake before the filing this morning, “we believe this soap opera will end with Musk owning Twitter after this aggressive hostile takeover of the company.”
Ives said that it would be hard for any other bidders or consortium to emerge, and the Twitter board will be likely forced to accept this bid and/or run an active process to sell Twitter.
Ives added that in the coming days, there will be a lot of questions around financing, regulatory issues and Musk’s ability to balance his time between Twitter, Tesla and SpaceX, “but ultimately, based on this filing, it is a now or never bid for Twitter to accept,” Ives said. He added that the next step will be Twitter’s board officially reviewing the Musk filing and exhibit letter, and then it’s “get out the popcorn time, as we expect many twists and turns in the weeks ahead as Twitter and Musk walk down this marriage path.”
According to a voice script of a portion of Musk’s comments to Taylor, Musk ended his letter to the board writing:
“Best and Final: I am not playing the back-and-forth game. I have moved straight to the end. 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. 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.”
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