Twitter board finally accepts Elon Musk’s $44bn offer

Social media giant Twitter announced via a press release that it has finally accepted Elon Musk’s offer to acquire the company at $54.20/share, valuing the social media platform at $44 billion. Upon completion of the transaction, Twitter will become a privately held company.

The stock was halted for the news but was up more than 6% once it resumed trading.

This puts to bed the weeks-long drama that started when the billionaire offered to buy 100% of Twitter for $54.20 per share in cash. This was just a couple of days after he purchased 9.2% of the company making him the largest shareholder.

Twitter Board reacted to his offer by coming out with a “poison pill” plan to thwart the Tesla CEO’s takeover bid. However this did not deter him as he came up with a plan on how he would finance the purchase. Then people started taking him seriously. Over last weekend, rumours were circulating that Elon Musk and the Twitter board were meeting to consider his offer.

Here’s the full announcement from Twitter:

Twitter, Inc. (NYSE: TWTR) today announced that it has entered into a definitive agreement to be acquired by an entity wholly owned by Elon Musk, for $54.20 per share in cash in a transaction valued at approximately $44 billion. Upon completion of the transaction, Twitter will become a privately held company.

Under the terms of the agreement, Twitter stockholders will receive $54.20 in cash for each share of Twitter common stock that they own upon closing of the proposed transaction. The purchase price represents a 38% premium to Twitter’s closing stock price on April 1, 2022, which was the last trading day before Mr. Musk disclosed his approximately 9% stake in Twitter.

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.”

Parag Agrawal, Twitter’s CEO, said, “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.”

“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,” said Mr. Musk. “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.”

Transaction Terms and Financing
The transaction, which has been unanimously approved by the Twitter Board of Directors, is expected to close in 2022, subject to the approval of Twitter stockholders, the receipt of applicable regulatory approvals and the satisfaction of other customary closing conditions.

Mr. Musk has secured $25.5 billion of fully committed debt and margin loan financing and is providing an approximately $21.0 billion equity commitment. There are no financing conditions to the closing of the transaction. 

For further information regarding all terms and conditions contained in the definitive transaction agreement, please see Twitter’s Current Report on Form 8-K, which will be filed in connection with the transaction.

First Quarter 2022 Earnings Results
Twitter plans to release its first quarter fiscal year 2022 results before market open on April 28, 2022. In light of the pending transaction announced today, Twitter will not hold a corresponding conference call.

Advisors
Goldman Sachs & Co. LLC, J.P. Morgan, and Allen & Co. are serving as financial advisors to Twitter, and Wilson Sonsini Goodrich & Rosati, Professional Corporation and Simpson Thacher & Bartlett LLP are serving as legal counsel. Morgan Stanley is acting as lead financial advisor to Mr. Musk. BofA Securities and Barclays are also acting as financial advisors. Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel.

Elon Musk tweeted “Yess!!!” in response to the completion of the deal.