Elon Musk swoops down on Twitter with $41 bln cash offer

Elon Musk has offered to buy Twitter for around $41 billion in cash, saying the social media company he has often criticized needs to go private to see effective changes, Reuters said.

Musk’s price of $54.20 per share, which was disclosed in a regulatory filing Thursday, represents a 38% premium over Twitter’s close on April 1, the last trading day before it went public. the participation of more than 9% of the CEO of Tesla (TSLA.O) in the company.

The billionaire turned down an offer to join Twitter’s board earlier this week after disclosing his stake in the company, a move that analysts said signaled his intention to take over the company as a board position that would have limited its stake to just under 15%.

“Since making my investment, I now realize that the company will not prosper or meet this social imperative in its current form. Twitter must be transformed into a private company,” Musk said in a letter to Twitter Chairman Bret Taylor.

Musk, a self-described free speech absolutist, has been critical of the social media platform and its policies, recently conducting a Twitter poll asking users if they believed the platform adheres to the principle of free speech.

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

Twitter will review Musk’s offer on the advice of Goldman Sachs & Co and Wilson Sonsini Goodrich & Rosati, a source told Reuters.

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

Musk has amassed more than 80 million followers since joining the site in 2009 and has used the platform to make various announcements, including mocking a private deal for Tesla that landed him in trouble with regulators.

He has also been sued by former Twitter shareholders who say they missed out on his recent share price surge because he waited too long to reveal his stake.

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

“Other bidders/consortiums would be unlikely to come forward and Twitter’s board will likely be forced to accept this offer and/or run an active process to sell Twitter,” Daniel Ives, an analyst at Wedbush Securities, wrote in a note to clients.

“There will be a lot of questions about funding, regulation, Musk’s (Tesla, SpaceX) time balance over the next few days, but ultimately, based on this presentation, it’s a now-or-never offer for Twitter to accept,” Ives said.

Musk said that Morgan Stanley was the financial adviser on the offer.

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