Tesla CEO and billionaire entrepreneur has agreed to buy over social networking giant Twitter and take it private in a deal worth US$44 billion.
He has secured US$25.5 billion of debt and margin loan financing, and will provide about US$21 billion in equity to fund the deal, according to Twitter’s statement released today (April 26).
The statement also revealed that investors will receive US$54.20 for each Twitter share they own. The price is 38 per cent more than the stock’s close on April 1 — the last business day before Musk disclosed a significant stake in the company.
In April 2022, it was reported that Musk has built a 9.2 per cent stake in Twitter.
Musk has been ramping up his criticism of Twitter as of late, alleging that the company’s algorithms are biased and feeds are cluttered with automated junk posts. He also suggested Twitter’s user growth was inflated by bots.
After rejecting an invitation to join the company’s board, he offered to take Twitter private on April 14, saying he’d make the platform a bastion of free speech and dropping other hints about the changes he’d make as owner.
Musk has to pay a fee if the deal falls apart
The deal has been unanimously approved by the company’s board, and is expected to be completed later this year.
Musk’s deal to buy Twitter includes a provision that the billionaire is required to pay the company a fee if he were to walk away or the deal falls apart, according to people familiar with the matter.
The deal does not include a “go-shop provision,” meaning Twitter isn’t allowed to solicit offers from other potential bidders.
“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 tweeted.
“Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it.”
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