Twitter Inc.’s board of directors today accepted Elon Musk’s offer to buy the company.
Musk earlier this month made an offer to acquire Twitter for $43 billion. In response, the company’s board implemented a so-called poison pill plan for one year. The move was designed to make it more difficult for Musk to buy Twitter without the board’s approval.
At the same time, the company left open the possibility of an agreement with the Tesla Inc. chief executive. Twitter stated when the poison pill plan was announced that the move will “not prevent the Board from engaging with parties or accepting an acquisition proposal if the Board believes that it is in the best interests of Twitter and its shareholders.”
Today, Twitter’s board accepted the buyout offer. The company’s stock was rising more than 5% today, to about $51.60 a share, still below the $52.40 a share Musk offered. As Twitter noted, that a 38% premium to Twitter’s closing stock price on April 1, the last trading day before Musk disclosed his 9% stake in Twitter.
“The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing, Twitter Chair Bret Taylor said in a statement. “The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”
Twitter CEO Parag Agrawal added in a short, bland statement: “Twitter has a purpose and relevance that impacts the entire world. Deeply proud of our teams and inspired by the work that has never been more important.”
As for Musk, he said in a statement that “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. I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it.”
According to the Journal, Musk held discussions with multiple Twitter shareholders on Friday to highlight the advantages of his acquisition offer “while repeating that the board has a ‘yes-or-no’ decision to make.” Additionally, Musk reportedly told shareholders that he doesn’t believe Twitter’s management can raise the company’s stock price to match his $43 billion offer.
The Twitter board, meanwhile, has reportedly been “looking for other offers.”
Earlier this month, sources told CNBC that private equity firm Thoma Bravo may submit a competing acquisition bid for Twitter. Last week, however, it was reported that the private equity firm could opt to partner with Musk on a deal instead of submitting a competing bid. Bloomberg reported today that Musk is continuing to hold talks with potential co-investors who might back his acquisition offer.
An important development in Musk’s effort to buy Twitter occurred last week, when he announced that he had secured $46.5 billion worth of financing commitments to buy Twitter. The commitments include $25.5 billion in debt financing from more than a half dozen major banks. Additionally, Musk plans to provide $21 billion in equity financing personally for the proposed acquisition.
With reporting from Robert Hof