Baku 13˚C Sunny

Elon Musk swoops on Twitter with $41 billion cash offer

Multimedia 19:04 14 Apr, 2022

My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder

Elon Musk swoops on Twitter with $41 billion cash offer

Elon Musk took aim at Twitter (TWTR.N) with a $41 billion cash offer on Thursday, prompting a spike in shares of the social media giant, which the Tesla CEO said needs to be taken private to grow and become a platform for free speech.

"Twitter has extraordinary potential. I will unlock it," Musk said in a letter to Twitter's board on Wednesday, which was made public in a regulatory filing on Thursday, Qazet.az reports.

Musk's offer price of $54.20 per share represents a 38% premium to Twitter's April 1 close, the last trading day before the Tesla (TSLA.O) chief executive's stake of more than 9% in the social media platform was made public.

The billionaire rejected an offer to join Twitter's board this week after disclosing his stake, a move which analysts said signaled his intention to take over the company as a board seat would have limited his stake to just under 15%.

"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," Musk said in his letter to Twitter Chairman Bret Taylor.

Musk, who calls himself a free-speech absolutist, has been critical of the social media platform and its policies, and recently ran a poll on Twitter asking users if they believed it adheres to the principle of free speech.

"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 added.

Twitter will review the offer with advice from Goldman Sachs and Wilson Sonsini Goodrich & Rosati, a source told Reuters.

Shares in Twitter jumped 12% in premarket trading, while those of Tesla fell about 1%. Based on Twitter's Wednesday closing price of $45.85, its price in pre-market trading in New York implied a 35% chance of the company accepting Musk's offer.

The total deal value of $41 billion was calculated based on 763.58 million shares outstanding, according to Refinitiv data.

Musk said U.S. investment bank Morgan Stanley was acting as financial adviser for his offer. He did not say how he would finance the transaction if it goes ahead.