Elon Musk has proposed buying Twitter for an estimated $41 billion in cash, in a move that comes just days after Tesla’s chief executive turned down a seat on the social media company’s board.
The billionaire said the social media company he has often criticized needs to go private to see effective changes.
Musk’s offer price of $54.20 per share, which was disclosed in a regulatory filing on Thursday, represents a 38% premium over Twitter’s close on April 1, the last trading day before it was announced. made public the participation of more than 9% of the CEO of Tesla in the company.
The total value of the transaction was calculated based on 763.58 million shares outstanding, according to Refinitiv data.
Twitter shares rose 12% in premarket trading.
“I invested in Twitter because I believe in its potential to be the platform for freedom of expression around the world, and I believe that freedom of expression is a social imperative for a functioning democracy,” Musk says in the presentation.
“However, since making my investment, I now realize that the company will not prosper or meet this social imperative in its current form. Twitter needs to transform into a private company.”
Musk said the offer “is my best and last offer and if it is not accepted, I would have to reconsider my position as a shareholder.”
He said that Morgan Stanley was the financial adviser on the offering.
Twitter said it has received Musk’s offer and will decide whether it is in the best interest of shareholders to accept or continue operating as a publicly traded company.
“Twitter’s board of directors will carefully review the proposal to determine the course of action it believes is in the best interest of the company and all of Twitter’s shareholders,” the company said.
Musk turned down an offer to join Twitter’s board earlier this week after disclosing his stake in the company, a move that analysts said signaled his intention to take over the company, as a board seat would have limited its stake to just under 15%.
Wedbush analyst Daniel Ives said in a note to a client that he believes “this soap opera will end with Musk owning Twitter after this aggressive and hostile takeover of the company.”
He believes it would be difficult for any other bidder or consortium to come forward and said Twitter’s board of directors will likely be forced to accept Musk’s offer or start a process to sell the company.
The billionaire has amassed more than 80 million followers since joining the site in 2009 and has used the platform to make various announcements, including mocking a private deal for Tesla that landed him in trouble with regulators.
Musk and Tesla agreed in 2018 to pay $40 million in civil penalties and to have Musk’s tweets approved by a corporate lawyer after he tweeted about having the money to take Tesla private at $420 a share.
That didn’t happen, but the tweet sent Tesla’s stock price higher. Musk’s latest issue with the US Securities and Exchange Commission (SEC) could be his delay in notifying regulators about his growing involvement in Twitter.
Musk has described himself as a “free speech absolutist” and has said he doesn’t think Twitter lives up to the principles of free speech, a view shared by supporters of Donald Trump and other figures. right-wing politicians who have had their accounts suspended for violating Twitter’s content rules.
Musk has also been sued by former Twitter shareholders who say they missed out on the recent rise in their share price because they waited too long to reveal their involvement.
“There will be a lot of questions about funding, regulation, Musk’s (Tesla, SpaceX) time balance over the next few days, but ultimately, based on this presentation, it’s a now-or-never offer for Twitter to accept,” Wedbush’s Ives said.
Twitter’s smaller-than-expected user additions in recent months have raised questions about its growth prospects, even as it pursues big projects like audio chat rooms and newsletters to end a long-standing stalemate.
“Twitter has extraordinary potential. I will unlock it,” Musk said in the letter from him.