Done Deal: Twitter Agrees to Sell Itself to Elon Musk
April 25, 2022 in News by RBN Staff
Source: Hollywood Reporter
The shocking deal caps off a volatile few weeks for the social media company and will give the richest person in the world control of the platform.
It’s official: Elon Musk will buy Twitter.
The Tesla and SpaceX CEO and the social media firm unveiled the deal Monday, with the company accepting an offer that values it at about $44 billion.
Once the deal is completed, the richest person in the world will own arguably the most influential social platform in the world, though from a business and user standpoint Twitter is significantly smaller than companies like Facebook or TikTok.
“The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing,” said the company’s independent board chair Bret Taylor, in a statement announcing the deal. “The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”
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Musk said at a conference that he made the offer to buy Twitter because it had “become kind of the de facto town square, so it is just really important that people have the reality and the perception that they are able to speak freely within the bounds of the law.” He added: “This is not a way to make money, my strong intuitive sense is that having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization, I don’t care about the economics at all.”
Musk added in a statement Monday that “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.”
He added, “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.”
Now, when the deal closes, he will have to make his admittedly vague ambition a reality and square it with a difficult regulatory environment, not to mention human nature.
The move caps off what has been a volatile and unpredictable few weeks for the company, with the odds of a purchase changing almost daily.
Musk quietly began buying shares in Twitter in January, but didn’t disclose his 9.1 percent stake until early April. Musk, an active user of Twitter (who used the service to solicit and suggest ideas for its future), was offered a seat on the company’s board, though he would turn that offer down, forcing Twitter’s new CEO Parag Agrawal to warn employees of “distractions ahead.”
Sure enough, just a few days later, Musk offered to buy Twitter for $43 billion, telling board chair Taylor in a text message: “Twitter has extraordinary potential. I will unlock it.” With the offer contingent on Musk securing financing, the company instituted a “poison pill” plan to force negotiations and slow down the hostile takeover effort.
On April 21, Musk made a more formal offer to the company, having secured the financing needed to back up the bid. He also warned that he would consider a tender offer if negotiations didn’t begin.
With the financing secured, Twitter had little excuse not to at least hold direct negotiations with Musk. And those talks ultimately led to a deal.
Twitter says the deal will close this year, pending approval from shareholders and regulatory approvals. It added that there are no financing conditions to the closing of the transaction.
Agrawal added a somewhat melancholy comment of his own, in making the announcement: “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.”
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