Last week Elon Musk announced his bid to fully acquire Twitter and take it off the stock market, and initially it seemed like the company would politely (or not so politely) decline. However, a few days later it appears as it did some more thinking and today it officially announced that it’s accepting Musk’s bid.
This means that Twitter has now “entered into a definitive agreement to be acquired by an entity wholly owned by Elon Musk”, according to the company’s press release. The price is $54.20 per share in cash (which means not shares in SEC-speak, and not actual cash, by the way). Thus the total value of the transaction is approximately $44 billion. Upon completion (which could take months because of all the regulatory scrutiny it’s bound to come across), Twitter will become a privately held company and will no longer have its shares traded on any stock exchange.
This was Musk’s initial plan after all, and it looks like it’s all coming together quite nicely for him. The price per stock he’s paying represents a 38% premium over Twitter’s closing stock price when its shares were last traded.
“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”, Musk said. “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 continued.
Musk has secured $25.5 billion of “fully committed debt and margin loan financing” and is using about $21 billion of his own equity on top of that to finance the purchase.