Twitter board has approved the offer by Tesla CEO and world's richest man Elon Musk to acquire 100 per cent stake in the company at $54.20 a share, or nearly $44 billion.
In a press release, the company announced that it has entered into a definitive agreement to be acquired by an entity wholly owned by Elon Musk, for $54.20 per share in cash in a transaction valued at approximately $44 billion.
"Upon completion of the transaction, Twitter will become a privately held company," the company said.
"Under the terms of the agreement, Twitter stockholders will receive $54.20 in cash for each share of Twitter common stock that they own upon closing of the proposed transaction. The purchase price represents a 38% premium to Twitter’s closing stock price on April 1, 2022, which was the last trading day before Mr Musk disclosed his approximately 9 per cent stake in Twitter," it added.
Musk had in March this year bought 9.1 per cent stake in the company, which was revealed in early April in US security filings. Later, on 14 April, he offered to buy 100 per cent stake in the microblogging site for $54.20 a share.
Musk had said that his $54.20-a-share offer is his “best and final".
Following Musk's offer, Twitter board had put in place a "poison pill" to block him from increasing his stake in the company.
However, after Musk updated his proposal to show he had secured financing for taking Twitter private, the board decided to negotiate with him.
Musk met privately Friday (22 April) with several shareholders of the company to extol the virtues of his proposal while repeating that the board has a “yes-or-no” decision to make, according to people familiar with the matter, the Wall Street Journal reported on Monday.
After the announcement of the agreement, Bret Taylor, Twitter’s Independent Board Chair, said, “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.”
Parag Agrawal, Twitter’s CEO, said, “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 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," he added.
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.
A self-proclaimed "free speech absolutist", Musk had earlier in March said that witter "serves as the de facto public town square" and by "failing to adhere to free speech principles", the platform "fundamentally undermines democracy".
Musk, who is also the CEO of SpaceX that owns Starlink satellite internet service, had earlier refused to comply with requests from "some governments" to block Russian news sources, saying that the company wouldn't do so "unless at gunpoint".
"Sorry to be a free speech absolutist," he said in a tweet on 5 March.
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