Billionaire entrepreneur Elon Musk took aim at Twitter Inc with a $43 billion cash takeover offer on Thursday, with the Tesla CEO saying the social media company needs to be taken private to grow and become a platform for free speech.
“I think it’s very important for there to be an inclusive arena for free speech,” Musk, already San Francisco-based Twitter’s second-largest shareholder, said at a TED Talk in Vancouver when asked about his bid.
Musk made the bid on Wednesday in a letter to the board of Twitter – the micro-blogging platform that has become a global means of communication for individuals and world leaders – and it was made public in a regulatory filing on Thursday. His offer price of $54.20 per share represents a 38% premium to Twitter’s April 1 close, the last trading day before his 9.1% stake in the social media platform was made public.
Musk, the world’s richest person with a $273.6 billion fortune according to a Forbes tally, rejected an invitation to join Twitter’s board on Saturday after disclosing his stake, a move analysts said signaled his takeover intentions as a board seat would have limited his shareholding to just under 15%.
After his TED talk, Musk hinted at the possibility of a hostile bid in which he would bypass Twitter’s board and put the offer directly to its shareholders, tweeting: “It would be utterly indefensible not to put this offer to a shareholder vote.”
Twitter was evaluating the offer with guidance from Goldman Sachs and Wilson Sonsini Goodrich & Rosati, according to a source. The company was also preparing a poison pill as a protective measure against Musk raising his stake as early as Friday, the source said.
Saudi Arabia’s Prince Alwaleed bin Talal tweeted from his verified account about the deal. Describing himself as one of the “largest & long-term shareholders of Twitter,” he said Musk’s offer undervalued the company and he rejected it.
Musk, for his part, told Twitter it was his “best and final offer” and said he would reconsider his investment if the board rejects it.
“This is not a way to sort of make money,” Musk said during the TED Talk.
“My strong intuitive sense is that having a public platform that is maximally trusted and broadly inclusive, is extremely important to the future of civilization,” Musk added.
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Musk, a self-described “free speech absolutist,” has been critical of the social media platform and its policies, and recently ran a poll on Twitter asking users if they believed it adheres to the principle of free speech. More than 70% of the 2 million votes cast said “No”.
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.”
In remarks on Wednesday – before Musk’s announcement – Trump said he “probably wouldn’t have any interest” in returning to Twitter, where he had more than 88 million followers.
White House spokesperson Karine Jean-Pierre declined to comment on Musk’s offer for Twitter, saying that market regulators operate independently from political leadership.
Twitter employees, some of whom were panicked over Musk’s impact on its ability to moderate content, attended an all-hands meeting on Thursday. Chief Executive Officer Parag Agrawal reassured them that the company was not being “held hostage” by news of Musk’s offer to buy the company, according to a source.
Musk said U.S. investment bank Morgan Stanley was acting as financial adviser for his offer. He did not say how he would finance the transaction if it goes ahead, but told the TED talk audience he “had sufficient assets,” without saying more.