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After almost a month of acquiring 9.1% of Twitter stakes and rejecting a seat on the company’s board, Elon Musk has entered into a definitive agreement with Twitter to buy the company for $54.20 per share in cash, which will value the deal at approximately $44 billion.
Once the deal is completed, Twitter will become a private company. All the Twitter stockholders will receive $54.20 for each share they own when the transaction is closed.
“I want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spambots, and authenticating all humans. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it,” said Elon Musk. “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.”
The $54.20 offer is a significant improvement against the $39.31 per share price at which Twitter was trading before Musk’s announcement that he had taken a 9.1% stake in the company shot up the pre-market price to $49.09.
The Twitter board unanimously approved the transaction, and it is expected to be completed this year following Twitter stockholders’ approval.
“Twitter as a company has always been my sole issue and my biggest regret. It has been owned by Wall Street and the ad model. Taking it back from Wall Street is the correct first step,” Twitter founder Jack Dorsey tweeted. “In principle, I don’t believe anyone should own or run Twitter; however, Elon is the singular solution I trust.”
Musk has committed $21 billion and has secured $25.5 billion of fully committed debt and margin loan financing.
“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,” said Bret Taylor, Twitter’s independent board chair.
Meanwhile, Tesla stocks have taken a hit after it was confirmed that Twitter’s board of directors have agreed to terms with Elon Musk.