Twitter, Inc. has confirmed and announced that it has entered into an agreement with Elon Musk in his personal capacity to acquire the company. Listed on the New York Stock Exchange (NYSE) unsder the symbol TWTR. Twitter will be acquired by Musk for $54.20 per share in cash.
The acquisition, if approved by regulators, values Twitter at $44 billion and will see one of its co-founders and former CEO, Jack Dorsey, walk away with approximately $974 million in cash.
"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. 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," said Mr. Musk. "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," said Parag Agrawal, CEO of Twitter.
No confidence in Twitter management
Musk has been very vocal and publicly so about his lack of confidence in the Twitter management to turn the company around. Furthermore, he has stated that Twitter needs to emphasize freedom of speech. In his own words, Musk is a freedom of speech absolutist.
He has also stated that he will buy Twitter not to make money from it but he believes it is an important part of society.
"The Twitter Board conducted a thoughtful and comprehensive process to assess Elon's proposal with a deliberate focus on value, certainty, and financing. The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter's stockholders," said Bret Taylor, Twitter's Independent Board Chair.
The transaction, which has been unanimously approved by the Twitter Board of Directors, is expected to close in 2022, subject to the approval of Twitter stockholders, the receipt of applicable regulatory approvals, and the satisfaction of other customary closing conditions.
Musk has secured $25,5 billion of fully committed debt and margin loan financing and is providing an approximately $21.0 billion equity commitment. There are no financing conditions to the closing of the transaction.
For further information regarding all terms and conditions contained in the definitive transaction agreement, please see Twitter's Current Report on Form 8-K, which will be filed in connection with the transaction.
Twitter management has also told engineers that no changes will be allowed on the platform until Friday. This is to safeguard against any possible rogue engineers that might not agree with the acquisition by Elon Musk.
Once the acquisition is completed, Twitter will become a privately held company.
— By Tefo Mohapi