Elon Musk to Acquire Twitter in Massive $44 Billion Buyout
Despite previous talks of a “poison pill” strategy enacted by its board to defend against a takeover, Twitter has announced that it has entered into a definitive agreement to be acquired by an entity wholly owned by Elon Musk — the richest man on the planet — for $54.20 per share in cash in a $44 billion transaction. Upon completion of the deal — which was unanimously approved by the Twitter board — the platform will become a privately held company, Twitter said in a press release.
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“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 in the release. “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.”
Twitter shares were up 6% following the news.
Wedbush Securities analyst Dan Ives wrote in a note sent to GOBankingRates that, “It all came down to no other bidders or white knights emerging in the M&A process and the Twitter board’s back was against the wall once Musk detailed his $46 billion in financing last week to get pen to paper on this deal.”
Mere hours before the deal was announced, Musk tweeted: “I hope that even my worst critics remain on Twitter, because that is what free speech means.”
Bloomberg reports that Musk used one of the biggest leveraged buyout deals in history to take a 16-year-old social networking platform private.
Under the terms of the agreement, Twitter stockholders will receive $54.20 in cash for each share of Twitter common stock that they own upon closing of the proposed transaction. The purchase price represents a 38% premium over Twitter’s closing stock price on April 1, 2022, which was the last trading day before Musk disclosed his approximately 9% stake in Twitter, according to the release.
The deal is expected to close in 2022, subject to the approval of Twitter stockholders.
As GOBankingRates previously reported, Musk has secured $25.5 billion of fully committed debt and margin loan financing and is providing an approximate $21 billion equity commitment.
Wedbush said it does not expect any major regulatory hurdles to the deal getting done “as this soap opera now ends with Musk owning Twitter.”
“The board got some extra time with the poison pill but ultimately had to get to the negotiation table with Musk to get this deal done as the clock struck midnight on Twitter’s history as a public company. The deal is expected to close in 2022, subject to the approval of Twitter shareholders,” Ives wrote.
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The Wall Street Journal reports that this deal — if it goes through — would mark one of the biggest acquisitions in tech history, and will likely have global repercussions (for years to come) related to how billions of people use social media.
“Twitter has a purpose and relevance that impacts the entire world. Deeply proud of our teams and inspired by the work that has never been more important,” Parag Agrawal, Twitter’s CEO, said in the release.
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This article originally appeared on GOBankingRates.com: Elon Musk to Acquire Twitter in Massive $44 Billion Buyout
