About a week ago, Musk submitted a filing with the SEC that shows that the Tesla CEO has secured $46.5 billion in debt and equity financing to support a potential Twitter takeover bid.
The Twitter board has accepted the offer from businessman Elon Musk to buy the social network company outrightly. Following the completion of the transaction, Twitter Inc (NYSE: TWTR) will become a privately held company. The Twitter Board of Directors has unanimously approved the offer, and the transaction will close in 2022. However, the deal remains subject to stakeholders’ approval, regulatory approvals, and other standard closing conditions.
Twitter released an official announcement revealing that it has entered into a “definitive agreement to be acquired by an entity wholly owned by Elon Musk.” TWTR closed up 5.64% after trading stopped for the news. At press time, the stock is up 0.44% to $51.93 in after-hours trading.
Twitter Accepts Offer from Elon Musk to Acquire Twitter
The offer agreement between Twitter and Elon Musk is that he will pay $54.20 per share in cash. This equals approximately $44 billion. The amount Elon Musk offered to purchase Twitter is a 38% premium to its April 1st stock closing price. Per the agreement, shareholders will get $54.20 in cash for each share of the company’s common stock they own.
When Elon Musk initially proposed to buy Twitter outrightly around mid-April, the Twitter board said it was reviewing the offer. Now, the Independent Board Chair, Bret Taylor, noted that the board had completed its evaluation, adding:
“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.”
While highlighting his intention to buy Twitter during a Ted conference, Elon Musk said the platform should support its users’ free speech rights. Once again, the billionaire emphasized the need for free speech on the microblogging and social networking service.
“Free speech is the bedrock of functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated. 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 potential- I look forward to working with the company and the community of users to unlock it.”
Elon Musk Considers Hostile Bid
About a week ago, Musk submitted a filing with the SEC that shows that the Tesla CEO has secured $46.5 billion in debt and equity financing to support a potential Twitter takeover bid. His decision came as the Twitter board was yet to give a yes or no response to his buyout proposal. Musk secured $21 billion in equity financing and around $25.5 billion in debt financing. The debt financing came from Morgan Stanley (NYSE: MS) and more Wall Street giants.