Elon Musk's Deal To Buy Twitter
The Board of Twitter Inc. has to agree to sell the company to Elon Musk for around $43 billion in cash, the price the chief executive of Tesla, has called his “best and final” offer for the social media company.
Musk, reputedly the world's richest person, handled the negotiations to buy Twitter in a personal capacity and Tesla is not involved in the deal.
Musk is reportedly agreed with partners to help finance the acquisition and it was announced recently that several large financial institutions were supporting the offer.
Twitter had initially rebuffed the Musks' approach but now in the final stage of negotiations. Reuters has reported that Twitter's board met and has recommended a deal to its shareholders. Shares rose almost 4% to $50.62 on the reports, but remained below Mr Musk's offer price of $54.20 a share.
Twitter's shares were trading much higher than Musk's offer price as recently as November, suggesting a bargain price.
Musk's acquisition of Twitter has moved at remarkable speed. It emerged at the beginning of April that Musk, who is the boss of electric car company, Tesla, had become the largest shareholder in Twitter with a 9.2% stake. He was then invited to join Twitter's board but turned down the offer before launching a surprise bid for the company on 14 April. Twitter responded by putting in place a so-called "poison pill" defence to fend off Mr Musk. The mechanism would have created difficulties for Musk if he attempted to increase his stake in the company.
The Twitter board quicklu changed its mind after Musk revealed he had lined up a $46.5bn financing package for his offer, with funding from a mixture of his own assets and the backing of the leading Wall Street bank, Morgan Stanley, along with other firms.
Musk recently said that he believes that Twitter should be more open and transparent. "I think it's very important for there to be an inclusive arena for free speech," he told the TED2022 conference in Vancouver. The world's richest man, has also hinted at his plans for Twitter.
- He asked his 83.3 million followers on Twitter if the social media platform should allow people to edit their posts - 74% of those who responded wanted an edit button.
- Musk's has also criticised Twitter's process of verifying a Twitter account which he said was like "if Kafka had a Magic 8-Ball!".
The sale is an admission by Twitter that its recently appointed chief executive Parag Agrawal has not made progress in making the company more profitable, despite being on track to meet ambitious financial goals the company set for 2023. These included 'Twitter Blue' a subscription only version of the platform, available in the US, with enhanced features and no advertising.
Musk tweeted ".. Twitter is the digital town square where matters vital to the future of humanity are debated.... I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source... defeating the spam bots and authenticating all humans.. "
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