Elon Musk launches hostile takeover of Twitter for $54 a share
CBC
The on-again off-again relationship between Elon Musk and Twitter took a new twist on Thursday as the world's richest man made a hostile bid to buy up the whole company for more than $43 billion US.
In a regulatory filing, Twitter revealed that Musk has offered to buy up all outstanding shares in the company for $54.20 US a share. With 800 million shares out there, that values the company at just over $43 billion US.
It's the latest development in the month-long saga between Musk and the company, after it emerged in early April that Musk had quietly bought up more than 73 million shares in the company — more than any other single person or entity owns.
That led to him being invited to join the company's board of directors, before that overture fell apart days later.
WATCH | Musk's stake in Twitter raises questions about his plans:
In a tweet, Musk called his hostile takeover offer his "best and final price" for the company, and laid out a bit of his rationale.
"I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy," Musk said in the filing. "However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company."
Twitter's board acknowledged receipt of the offer and is said to be meeting on Thursday to discuss whether or not to accept or continue to operate as a publicly traded company. U.S. financial news channel CNBC is reporting that there's an all-staff meeting for Twitter employees at 5 p.m. ET Thursday to discuss the development.
Analyst Daniel Ives of Wedbush told CBC News in an email that he thinks it could take between 30 and 45 days for the process to sort itself out but ultimately he thinks Musk will be successful.
"This soap opera will end with Musk owning Twitter after this aggressive hostile takeover of the company." He thinks it would be hard for any other bidders or consortium to come forward and said Twitter's board will likely be forced to accept Musk's offer or start a process to sell the company.
Market reaction to the offer tells a slightly different story. While up in premarket trading, Twitter shares were changing hands on Thursday at roughly $46 a share. That's a sign investors don't think the deal will go through as described, and they aren't putting their money where Musk's mouth is.
"Investors are not expecting another offer or a bidding war," said Colin Cieszynski, a strategist at SIA Wealth Management in Toronto.
Other analysts think the story is far from over. "Musk's 'best and final' $43 billion non-binding offer has numerous conditions, including completion of financing, which we believe give it a low probability of success," Bloomberg Intelligence credit analyst Robert Schiffman said. But, "well-capitalized, white-knight suitors could emerge."
The billionaire has been a vocal critic of Twitter in recent weeks, mostly over his belief that it falls short on free speech principles. The social media platform has angered followers of Donald Trump and other far-right political figures who've had their accounts suspended for violating its content standards on violence, hate or harmful misinformation. Musk also has a history of his own tweets causing legal problems.
