Twitter’s board has accepted an offer from billionaire Elon Musk to buy the social media company and take it private, according to a statement released on Monday.
The stock closed up 5.64% for the day after it was halted for the news.
The cash deal at $54.20 per share is valued at around $44 billion, according to the press release. Twitter would become a private company on completion of the deal, which requires shareholder and regulatory approval.
Twitter announced Elon Musk’s acquisition of the company in this form;
“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.”
Musk has indicated that his primary interest in Twitter has to do with what he views as the company’s censorship of free speech.
“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 think it’s very important for there to be an inclusive arena for free speech,” he said at the time, acknowledging that some content moderation would be needed to deal with explicit calls to violence and ensure the service complied with the laws in the country in which it operates.
“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.”
He also said he generally would prefer “time-outs” to permanent bans, which could suggest a path for former President Donald Trump to rejoin the platform under Musk’s control. Twitter banned Trump from the platform following his tweets around the Jan. 6 insurrection at the U.S. Capitol, citing “the risk of further incitement of violence.”
Musk critics are concerned that the billionaire’s control over the platform will result in the silencing of their voices and others with whom he may disagree, given that he’s often blocked critics from his personal account.
Musk has said he would open up Twitter’s algorithm, putting content moderation decisions into clear view, although some researchers have said that would be difficult. He has also pushed for simple, broadly popular changes such as adding an edit button, as well as pledging to eliminate spam bots. And he has said he wants to open up Twitter’s verification process to more users, so the authenticity of accounts can be determined more easily.