Elon Musk offers $41 billion to buy Twitter and ‘transform’ it, Corporate News

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April 14 (Reuters) – Elon Musk has offered to buy Twitter for just over $41 billion (37.9 billion euros), saying the social network needed to be delisted to boost its growth and become a platform dedicated to freedom of expression.

“Twitter has extraordinary potential. I want to unleash it,” said the entrepreneur, who recently became the company’s second largest shareholder, in a letter addressed to his target’s board of directors on Wednesday and made public on Thursday.

The chief executive of electric car maker Tesla and founder of aerospace group SpaceX says he is ready to pay $54.20 per Twitter share, a 38% premium to the stock’s closing price on April 1, before the revelation of its entry into the capital at a little over 9%.

Twitter then offered to join the board, which he declined.

On Wall Street, Twitter shares gained 2.32% to 46.92 dollars at the start of the session while the Standard & Poor’s 500 index fell 0.41%.

In his letter, Elon Musk affirms that his offer is firm and definitive and adds that in the event of failure, he will reconsider his presence in the capital of Twitter.

“Since making my investment, I have realized that the business will not thrive and serve this societal imperative in its current form. Twitter needs to be a private company to be transformed,” writes he to Chairman of the Board, Bret Taylor.

MUSK WON’T SAY HOW HE PLANS TO FINANCE THE OFFER

Elon Musk, who presents himself as an unconditional defender of freedom of expression, has repeatedly criticized the rules of operation of the social network and he recently launched a poll on Twitter asking his approximately 80 million subscribers opinion on the company’s respect for freedom of expression.

Twitter will study the purchase offer with its advisory banks, Goldman Sachs and Wilson Sonsini Goodrich & Rosati, we learned from a source familiar with the matter.

“It should be difficult to bring forth another buyer or group of buyers and the Twitter board will likely be forced to accept this offer and/or initiate a process to sell Twitter themselves,” commented Wedbush Securities analyst Daniel Ives in a note to clients.

Elon Musk, advised by Morgan Stanley, did not specify how he planned to finance his offer.

“Given the amount of the transaction, we think it is conceivable that part of Tesla shares will be sold as his fortune is linked to the company,” said Angelo Zino, financial analyst at CFRA Research.

Tesla shares fell 3.04% on the Nasdaq.

Elon Musk, the world’s largest fortune according to a ranking established by Forbes, sold at the end of last year for tax reasons about 10% of his stake in the automaker, for just over 15 billion dollars.

(Report Chavi Mehta and Uday Sampath in Bangalore, French version Marc Angrand)


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