Elon Musk launches full $41bn Twitter takeover: ‘It has extraordinary potential – I will unlock it’
Elon Musk has offered to buy Twitter for $54.20 per share this morning as the drama surrounding the social media giant continues.
According to regulatory filing, this price represents a 38 per cent premium to the closing price of Twitter’s stock on April 1, the day before the billionaire became the largest shareholder of the company, snapping up 9.2 per cent of shares.
“Since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company,” Musk said in a letter to Twitter Chairman Bret Taylor, and as reported by Reuters.
“My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder,” Musk added.
If Musk were to snap up the entire company at this price, it would set him back around somewhere between $41-43bn.
Twitter shares jumped 12 per cent following the news and have clearly riled up investors.
Rumours first emerged that Musk would be launching a takeover after he rejected a seat on the Twitter board earlier this week.
Nonetheless, some have criticised today’s announcement as yet another publicity stunt from the eccentric businessman.
Neil Campling, Head of TMT Research at Mirabaud Equity Research, said it could be a diversion tactic away from Tesla’s dwindling market share and the recall of thousands of cars.
Sophie Lund-Yates, Lead Equity Analyst, Hargreaves Lansdown said the move has “shocked the market”.
Discussing the rationale behind it, she said: “Elon Musk thinks Twitter’s potential is stifled by current management and its position as a public company. Changing either of those things is an enormous move, and one that will sting the ego of the existing management team.
“The premium being offered by Musk to takeover the company suggests he thinks very highly indeed of what Twitter could be, but not what it is at present.”
Yesterday it was reported that the Tesla and SpaceX chief was also facing legal action from investors in New York for not making his initial news public that he had bought a major stake in the company.
It is understood that Morgan Stanley are the financial advisers on Musk’s takeover attempts.