- Twitter Board has accepted Musk’s offer to acquire the publicly traded company at $54.20/share.
- Musk said that he will enhance Twitter with new features
- For increasing trust algorithms will be made open source
- Authenticating humans to curb bot
Twitter Board has announced acceptance of Musk’s offer to acquire the publicly traded company at $54.20/share. Offer valuing the social media platform at $44 billion. Trading of Twitter Shares have been stopped in Nasdaq following the announcement of Company going private.
In Stock Exchange filing, Twitter announced that transaction will be an all-cash deal and Twitter stockholders will receive $54.20 in cash for each share. Shareholders will receive the amount after the transaction is closed successfully.
Purchase price is @ 38 percent premium to Twitter’s closing share price on April 1, 2022 i.e. day on which Musk revealed his 9% acquired stake in the company from the open market.
Mr Bret Taylor, Twitter’s Independent Board Chair said, “The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing. The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”
Musk said 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”
Musk has emphasised his commitment to enhance the features of Twitter, making algorithm public and authenticating and distinguishing human user from spam bots
“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.”
Funding will be in the form of structured finance. For acquisition, Musk has secured fully committed debt and margin loan financing $25.5 billion and an equity commitment of $21.0 billion . Morgan Stanley, BofA Securities and Barclays are acting as financial advisors. Out of three Morgan Stanley is the lead financial advisor. On the legal side, Skadden, Arps, Slate, Meagher & Flom LLP are serving as legal counsel to Musk. For Twitter, the list of financial Advisor includes Goldman Sachs, J.P. Morgan, Allen & Co. On legal side Wilson Sonsini Goodrich & Rosati, Professional Corporation, and Simpson Thacher & Bartlett LLP are serving as legal counsel.
On April 14th, Twitter confirmed that it had received an unsolicited, non-binding bid from Elon Musk to buy all of the company’s outstanding common stock for $54.20 in cash. Following the offer, the Twitter Board unanimously adopted a limited-term shareholder rights plan, allowing all Twitter shareholders to realize the full value of their investment. Plan was adopted with a view that If an entity, person, or group acquires beneficial ownership of 15% or more of Twitter’s outstanding common stock via a transaction not approved by the Board, the rights will become exercisable under the Rights Plan.
Twitter is one of the most influential platforms and overtaking it by Musk may fundamentally reset the way platform operates today. World expects Twitter to be more like a utility platform instead of deciding on the fairness of quality of speech. In the past It has been heavy handed and has been criticised for not making its algorithms public. If transaction succeeds, Musk governance is set to transform the Twitter for creating a better Word
Staff Galactik Views