Twitter April 25 announced that it has entered into a definitive agreement to be acquired by an entity wholly owned by Elon Musk, for $54.20 per share in cash in a transaction valued at approximately $44 billion.
Musk, who owns the Tesla car company, among other assets, is paying for the transaction through a secured $25.5 billion of fully committed debt and margin loan financing, and is providing an approximately $21 billion equity
commitment. There are no financing conditions to the closing of the transaction.
Upon completion of the transaction, Twitter will become a privately held company. Under the terms of the agreement, Twitter stockholders will receive $54.20 in cash for each share of Twitter common stock that they own upon closing of the proposed transaction.
The purchase price represents a 38% premium to Twitter’s closing stock price on April 1, 2022, which was the last trading day before Mr. Musk disclosed his approximately 9% stake in Twitter.
“The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders,” Bret Taylor, Twitter’s Independent Board Chair, said in a statement.
Musk said the transaction underscores free speech as a bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated.
“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,” Musk said. “Twitter has tremendous potential — I look forward to working with the company and the community of users to unlock it.”
The transaction, which has been unanimously approved by the Twitter Board of Directors, is expected to close in 2022, subject to the approval of Twitter stockholders, the receipt of applicable regulatory approvals and the satisfaction of other customary closing conditions.