The deal ends Twitter’s run as a public company since its 2013 initial public offering
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Apr 25, 2022 • 15 hours ago • 2 minute read • 12 Comments
Elon Musk, the world’s richest person according to a tally by Forbes, is negotiating to buy Twitter in a personal capacity and Tesla is not involved in the deal. Photo by REUTERS/Dado Ruvic/Illustration Elon Musk clinched a deal to buy Twitter Inc for US$44 billion in cash on Monday in a transaction that will shift control of the social media platform populated by millions of users and global leaders to the world’s richest person.
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It is a seminal moment for the 16-year-old company that emerged as one of the world’s most influential public squares and now faces a string of challenges.
Discussions over the deal, which last week appeared uncertain, accelerated over the weekend after Musk wooed Twitter shareholders with financing details of his offer.
Under pressure, Twitter started negotiating with Musk to buy the company at the proposed US$54.20 per share price.
“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 in a statement.
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
Elon Musk
Shares were up about 6 per cent following the news. The deal represents a near 40 per cent premium to the closing price the day before Musk disclosed he had bought a more than nine per cent stake. Even so, the offer is below the US$70 range where Twitter was trading last year.
The transaction was approved by the board and is now subject to a shareholder vote.
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In a prepared statement the company said Musk secured US$25.5 billion of debt and margin loan financing and is providing a US$21-billion equity commitment.
It was not immediately clear what the breakup fee would be or who would run the new company.
Twitter’s outsized importance as a mouthpiece for politicians, political dissidents and activists belies its relatively small size.
Although it is only about a tenth of the size of far larger social media platforms like Meta Platforms Inc.’s Facebook, it has been credited with helping spawn the Arab Spring uprising and accused of playing a role in the Jan. 6, 2021, storming of the U.S. Capitol.
After Twitter banned former President Donald Trump over concerns around incitement of violence following last year’s U.S. Capitol attack by his supporters, Musk tweeted: “A lot of people are going to be super unhappy with West Coast high tech as the de facto arbiter of free speech.”
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Trump won’t return Republicans on Monday cheered the news of a possible Musk buyout of Twitter, betting on Trump’s reinstatement on the service.
But Trump said he will not return to social media platform even if his account is reinstated following the platform’s purchase by Musk.
Brookfield, Blackstone rule out financing Elon Musk’s Twitter bid Twitter co-founder Jack Dorsey takes aim at board in series of tweets Elon Musk launches $41.39-billion hostile takeover of Twitter ‘This is for the best’: Elon Musk spurns Twitter’s offer to join board in surprise twist Trump told Fox News that he will formally join his own Truth Social startup over the next seven days, as planned.
“I am not going on Twitter, I am going to stay on Truth,” Trump told Fox News. “I hope Elon buys Twitter because he’ll make improvements to it and he is a good man, but I am going to be staying on Truth,” Trump said.
© Thomson Reuters 2022
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