Elon Musk yesterday pounced on Twitter with a £31.4billion bid to take the social media giant off the stock market.
The Tesla tycoon’s offer of $54.20 a share comes just days after he rejected an invitation to join the company’s board.
The bid represents a 38 per cent premium to Twitter’s closing price on April 1, the last trading day before it was revealed that the billionaire had become the social media site’s biggest shareholder with a stake of more than 9 per cent.
Tesla tycoon Elon Musk has made an offer of $54.20 a share for Twitter just days after he rejected an invitation to join the social media giant’s board
The world’s richest man disclosed the offer in a regulatory filing, saying he is the right person to ‘unlock’ the social media platform’s ‘extraordinary potential’.
The move would transform the tech entrepreneur into a social media baron, able to set the future direction of a platform where he has 80m followers and which he has used to pursue personal vendettas and promote his agenda.
In a letter to Twitter chairman Bret Taylor, Musk set out his reason for the offer. He wrote: ‘I invested in Twitter as I believe in its potential to be the platform for free speech, and I believe free speech is a societal imperative for a functioning democracy.
‘However, since making my investment I now realise the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.’
But he hinted that he could walk away if the deal fell through. He added: ‘My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder.’
In a statement, Twitter confirmed that it had received an ‘unsolicited, non-binding proposal’ from 50-year-old Musk to acquire the company.
‘The Twitter board of directors will carefully review the proposal to determine the course of action that it believes is in the best interest of the company and all Twitter stockholders.’
Shares in New York initially shot higher by more than 5 per cent when news of the offer was made public, but fell back later in the session to finish down 1.7 per cent at $45.08. Shares fell after analysts said the move was hostile and questioned whether he would be able to push the deal through.
Late last night Musk was engaged in a Twitter spat with Saudi business tycoon Prince Al Waleed bin Talal who said that as one of Twitter’s biggest long-term shareholders, he rejected Musk’s takeover bid.
The prince added that he did not believe the offer ‘comes close to the intrinsic value of Twitter given its growth prospects’.
Musk is engaged in a Twitter spat with Saudi business tycoon Prince Al Waleed bin Talal who said that as one of Twitter’s biggest long-term shareholders, he rejected Musk’s takeover bid
The electric car company boss hit back at Al Waleed bin Talal, who owns Kingdom Holding Company, saying: ‘Interesting. Just two questions, if I may.
How much of Twitter does the Kingdom own, directly and indirectly? What are the Kingdom’s views on journalistic freedom of speech?’
This tweet was followed by a separate post from Musk who said it would be ‘utterly indefensible’ for Twitter not to put his offer to a shareholder vote.
He said: ‘They own the company, not the board of directors.’
If the deal was pushed through there are also question marks over whether Twitter’s chief executive Parag Agrawal would stay on.
Agrawal, 37, who took over in November, has history with Musk. In December Musk compared Agrawal to Joseph Stalin, superimposing his face on a famous photo of the Soviet dictator over his approach to free speech.
Agrawal hit back over Musk’s decision to decline a seat on the firm’s board earlier this week. He referred to Musk as a ‘distraction’, telling Twitter’s supporters to ‘tune out the noise’ and focus on the social media giant’s work.
Musk also caused doubt about the deal after speaking at a TED conference in Vancouver following the announcement.
Musk said he had ‘sufficient assets’ to fund the deal, before quipping that: ‘I’m not sure that I will actually be able to acquire it.’
He added at the conference that he had a ‘plan B’ if the bid was not successful although he did not elaborate further.
He also said that Twitter should avoid deleting posts, and advocated for ‘time outs’ over ‘permanent bans’ – a position that could ultimately pave the way for a return of banned figures, such as former US President Donald Trump, to the platform.
Twitter, based in San Francisco, owns one of the world’s largest social networks. It was set up in 2006 and makes most of its money through advertising. The group went public in November 2013.
Musk is the world’s richest man with a personal fortune of £209billion, according to Forbes, following the extraordinary rally of shares in Tesla, which is now worth nearly £1 trillion pounds.
Musk noted that his $54.20 per share offer amounted to a 54 per cent premium on where Twitter was trading in January, when he started buying shares.
Shares in Twitter are up almost a fifth on where they were before Musk’s stake was first disclosed, but they are down 40 per cent from the record high of $77.63 they scaled last March.
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