The world’s richest man has offered to buy Twitter.
Tesla CEO Elon Musk proposed his “best and final” offer to acquire all of Twitter’s outstanding shares at $54.20 per share in cash, saying the social media company needs to be transformed privately in order to serve as a platform for free speech, according to a 13D filing with the Securities and Exchange Commission (SEC) filed Thursday.
“As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter, and a 38% premium over the day before my investment was publicly announced,” Musk wrote in the letter to Twitter’s Board of Directors Chairman Bret Taylor and disclosed in the SEC filing.
Musk added that his cash offer is his “best and final offer” and noted if it is not accepted, he “would need to reconsider my position as a shareholder.”
The offer from Musk would value Twitter at about $43 billion. It also represents a 38% premium over the closing price on April 1 and an 18% premium over its closing price Wednesday. Currently, Twitter’s market valuation is about $37 billion.
The proposal was delivered in a letter to Twitter on April 13.
In the letter delivered to the company Wednesday night, Musk stated that Twitter must go private, a move considered to give the billionaire greater control of the social media company, in order for it to undergo changes that need to be made. According to Musk, Twitter needs to go private because, in its current state, it can “neither thrive nor serve” as a platform for free speech.
“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” Musk wrote.
“Twitter has extraordinary potential. I will unlock it,” Musk added.
Musk tapped Morgan Stanley as a financial advisor for the takeover bid transaction.
Twitter issued a press release confirming the offer, noting, “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.”
Earlier this month, Musk disclosed that he had been buying shares of Twitter since January, accumulating nearly 74 million shares, representing a 9.2% passive stake in Twitter. This made Musk the largest stakeholder of Twitter, based on the total number of shares held by investors. Twitter’s stock had its best day on April 4, since its IPO with shares closed more than 27% after an SEC filing revealed Musk’s stake in the company.
Shortly after, Twitter announced it had appointed Musk a seat to the company’s board, an offer the world’s richest man initially accepted.
However, Musk would have to agree to a cap on the total investment he could purchase of the company at 14.9%. Musk changed his mind and decided not to join the company board days later, according to Twitter CEO Parag Agrawal, who later warned investors of “distractions ahead.”
Twitter shares were up over 13 percent pre-market on the news of Musk’s offer. However, Twitter shares soon retreated and were trading up about 5% at the market open