Elon Musk rushes Twitter with $41 billion cash offer

Elon Musk speaks at the Automotive World News Congress at the Renaissance Center in Detroit, Michigan January 13, 2015. REUTERS/Rebecca Cook/File Photo

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April 14 (Reuters) – Elon Musk has offered to buy Twitter (TWTR.N) for around $41 billion in cash, saying the social media company he has often criticized needs to go private to see effective change.

Musk’s price of $54.20 per share, which was disclosed in a regulatory filing on Thursday, represents a 38% premium to Twitter’s close on April 1, the last trading day before participation by more of 9% of the CEO of Tesla (TSLA.O) in the company is not made public. .

The billionaire rejected an offer to join Twitter’s board earlier this week after disclosing his stake in the company, a move which analysts said signaled his intention to take over the company as a seat on the board of administration would have limited its participation to a little less than 15%. Read more

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“Since making my investment, I now realize that the business will not thrive and serve this societal imperative in its current form. Twitter needs to be turned into a private company,” Musk said in a letter to the president. from Twitter, Bret Taylor.

Musk, who calls himself a free speech absolutist, has been critical of the social media platform and its policies, and recently conducted a Twitter poll asking users if they think the platform adheres to the principle of freedom of expression.

“My offer is my best and last offer and if not accepted I will have to reconsider my position as a shareholder,” Musk added.

Twitter will consider Musk’s offer with advice from Goldman Sachs & Co and Wilson Sonsini Goodrich & Rosati, a source told Reuters.

Shares of the company jumped 12% in premarket trading, while those of Tesla fell about 1%. The total value of the transaction was calculated based on 763.58 million shares outstanding, according to data from Refinitiv.

Musk has amassed more than 80 million followers since joining the site in 2009 and has used the platform to make several announcements, including teasing a privatization deal for Tesla that landed him in hot water with regulators.

He has also been sued by former Twitter shareholders who say he missed his recent share price rise because he waited too long to disclose his stake. Read more

Twitter’s lower-than-expected user additions in recent months have raised doubts about its growth prospects, even as it pursues big plans like audio chat rooms and newsletters to end a long-standing stagnation.

“It would be difficult for any other bidder/consortium to emerge and Twitter’s board will likely be forced to accept this offer and/or initiate an active process to sell Twitter,” wrote Wedbush analyst Daniel Ives. Securities, in a client note.

“There will be a host of questions about Musk’s (Tesla, SpaceX) funding, regulations, time balancing in the next few days, but ultimately, based on this file, it’s an offer now or never for Twitter,” Ives said.

Musk said Morgan Stanley was the offer’s financial adviser.

“Twitter has tremendous potential. I will unlock it,” Musk said in his letter.

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Reporting by Chavi Mehta, Uday Sampath and Greg Romeliotis; Editing by Anil D’Silva

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