Elon Musk, who recently bought a 9.2% stake in Twitter, has made an offer to buy the company outright for $54.20 per share in cash in a hostile takeover of roughly $43 billion, according to documents filed with the SEC. Musk said in the filing that if his offer isn’t accepted, he’ll likely sell all his shares.
Musk, the wealthiest person in the world with a net worth of roughly $260 billion, made headlines earlier this month when it was announced he purchased an enormous slice of Twitter that made him its largest shareholder. Musk was going to join the board, but backed out at the last minute amid speculation he may want to just buy the entire company.
That speculation turned out to be correct, with Musk threatening to take his ball and go home if he can’t take the company private with his bid.
“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” Musk said in his SEC filing about the hostile takeover.
“However, 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 continued.
“As a result, I am offering to buy 100% of Twitter for $54.20 per share in cash, a 54% premium over the day before I began investing in Twitter and a 38% premium over the day before my investment was publicly announced. My offer is my best and final offer and if it’s not accepted, I would need to reconsider my position as a shareholder,” Musk wrote.
“Twitter has extraordinary potential. I will unlock it.”
The document makes clear Musk’s offer of $54.20 per share, a premium of over 50%, is his final offer, saying he’s “not playing the back-and-forth game.” Twitter convened an emergency board meeting a company all-hands Thursday in response.
“If the deal doesn’t work, given that I don’t have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder,” Musk said.
“This is not a threat,” Musk said in what was clearly a threat. “It’s simply not a good investment without the changes that need to be made,” Musk continued.
The billionaire spoke at length about his ideas on free speech later in the day during an interview at the TED conference. He added that, if his hostile takeover fails, he has devised a “plan B” but did not elaborate.
He also sparred sparred with one of the company’s largest shareholders, a Saudi royal—where else?—on Twitter.
Billionaire Al Waleed bin Talal wrote, “I don’t believe that the proposed offer by @elonmusk ($54.20) comes close to the intrinsic value of @Twitter, given its growth prospects. Being one of the largest & long-term shareholders of Twitter, @Kingdom_KHC & I reject this offer.”
The SpaceX CEO responded, “Interesting. Just two questions, if I may. How much of Twitter does the Kingdom own, directly & indirectly? What are the Kingdom’s views on journalistic freedom of speech?”
Musk is a frequent tweeter and often makes crude and juvenile jokes on Twitter that can get him into trouble. The 50-year-old recently floated the idea of changing the name of Twitter to “Titter” and once tweeted a meme comparing Canadian Prime Minister Justin Trudeau to Adolf Hitler. Both tweets were deleted by Musk.
And don’t even get us started on Musk’s jokes about the share price of Tesla, something that got him a slap on the wrist from the SEC. When you’re the wealthiest person in the world, a fine of just $40 million is the kind of chump change you find in your couch cushions.
Musk was sued this week by an investor in Twitter over his failure to properly disclose his huge stake in the company. Legally, Musk was required to file a notice with the SEC once he bought 5% of Twitter. But Musk didn’t file the proper paperwork until April 4, a full ten days late. The person who’s suing Musk in this case sold his shares during that period of illegal secrecy and lost money as a result.
What happens now? Twitter has to decide whether to accept this generous offer, or turn it down and deal with a lot of pissed off shareholders.