American businessman Elon Musk will buy the social network Twitter for $44 billion, said Twitter Inc in a press release.
The statement said that the transaction, which Twitter’s board has unanimously approved, is expected to close in 2022, subject to Twitter’s shareholder approval, appropriate regulatory approvals, and other standard closing conditions.
It also said that after completing the transaction, Twitter would become a non-public company.
Musk hoped his worst critics remain on Twitter “Because that is what free speech means,” he wrote on Twitter.
Musk says he plans to make “Twitter better than ever by improving the product with new features, making algorithms open source to increase trust, defeat spambots and authenticate all people.”
As per the US Securities and Exchange Commission, Musk owns a 9.2% stake in the microblogging service. At the same time, on April 11, he decided not to be a member of the company’s board of directors.
On April 23, Elon Musk announced that the purpose of his purchase of the microblogging platform Twitter was his desire to create a public platform that enjoys maximum trust in society around the world and gives everyone the right to speak.
Calling Twitter the digital town square, Must said, “free speech is the bedrock of a functioning democracy.” He said he wants to make the platform better by enhancing the product with newer features. He also plans to make the algorithms open source for increased trust, combat the spambots, and authenticate all Twitter users. He said Twitter has tremendous potential, and he looks forward to working with the company and the community of users to unlock it.
At the same time, he clarified that his interests do not intersect with commerce and the search for interesting investments.
The Financial Deal
On April 14, Elon Musk offered to buy Twitter shares for $41 billion ($54.2 per share). The social network leadership wanted Musk to agree to a seat on the board of directors. So, it could be limited to a maximum stake of 14.9%. However, the entrepreneur refused.
Under the terms of the agreement, as per the release, Twitter stockholders will be paid $54.20 in cash for a share of Twitter common stock upon closing the transaction put forward. The purchase price is 38% premium to Twitter’s closing stock price on April 1, 2022, which is the last trading day before Mr Musk disclosed his approximately 9% stake in Twitter.
As per Bret Taylor, Twitter’s Independent Board Chair, Twitter Inc.’s Board had conducted evaluated the offer based on value, certainty, and financing. He said the offer would deliver a substantial cash premium.
The financial advisors to Twitter for the deal are Goldman Sachs & Co. LLC, Allen & Co. and J.P. Morgan. Simpson Thacher & Bartlett LLP, Wilson Sonsini Goodrich & Rosati and Professional Corporation are the legal counsellors. On behalf of Musk, Morgan Stanley is acting as the lead financial advisor. BofA Securities and Barclays are the other financial advisors. Skadden, Slate, Arps, Meagher & Flom LLP is serving as legal counsel.
Musk has managed to secure $25.5 billion of fully committed debt and a margin loan financing. As per the release, Must is committing an approximately $21.0 billion equity. The release also says that no financing conditions have been imposed to the closing of the transaction.
Not yet a done and dusted deal
Although no one else wants it, the Twitter deal is far from approved and done. It remains to be seen if the Federal Trade Commission (FTC), Securities and Exchange Commission (SEC) and Department of Justice (DOJ) can weigh in and impose conditions.
As per the media Verge, Twitter CEO Parag Agrawal spoke to employees about the uncertain future of the company. The current head of the company also noted that he would remain in his position until the closing of the transaction but did not say what he would do after.
Agrawal also assured employees during the conversation that no cuts or layoffs are planned at this stage.
Parag Agrawal took over as CEO after Twitter released a letter of resignation from CEO and co-founder Jack Dorsey in November.
Donald Trump is not to return to Twitter
Former US President Donald Trump refused to return to the social network Twitter.
“I don’t go to Twitter; I will stay in TRUTH. I hope Elon buys Twitter because he will improve it, and he is a good person, but I am going to stay TRUTH,” Trump said in an interview with Fox News.
Former US President Donald Trump decided to launch his own social network ‘TRUTH’ after he was “permanently” banned from Twitter and Facebook at the beginning of the year.
Musk and Twitter
In March, Musk tweeted that he plans to create his own social media network. The entrepreneur asked his followers if they thought Twitter was upholding the principle of free speech, which is necessary for “a democratic society.” Most Internet users answered this question in the negative. There were about two million respondents to his poll.
On April 5, Musk became the richest man in the world, according to Forbes magazine. The businessman topped the list of billionaires for the first time. According to the publication, his fortune is estimated at $ 219 billion. Over the year, he became rich with $ 68 billion.