What you need to know
- Elon Musk wants to buy Twitter for $54.20 per share.
- He says that if the offer is not considered, he will have to reconsider his position as shareholder.
- Last week, he bought 9.2% of the company to become the largest shareholder. He was offered to become a board member, to which he declined.
SpaceX and Tesla founder Elon Musk offers to buy 100% of Twitter for $54.20 per share in cash.
Musk is offering to “acquire all of the outstanding Common Stock of the Issuer not owned by the Reporting Person for all cash consideration valuing the Common Stock at $54.20 per share,” according to a letter sent to Twitter on April 13. The letter was posted on the SEC.
In the letter, Musk states that he believes Twitter is in its potential to be “the platform for free speech around the globe, and I believe free speech is a social imperative for a functioning democracy.”
He adds that if his offer is not accepted, he will reconsider his position as a shareholder.
Last week, Musk purchased 9.2% of the company’s common stock and was offered a seat on Twitter’s board. A few days later, Musk told Twitter’s CEO, Parag Agarwal, that he no longer wanted to sit on the board, a move that would allow Musk to buy Twitter if he wanted to.
“If you want to take over a company, you’re usually in a better position to not be on its board,” Harry Kraemer, a clinical professor at Northwestern University’s Kellogg School of Management, told Canada’s the Globe and Mail. “Getting on the board has a very specific responsibility to make sure you’re not doing something in your own personal interest.”
This is because when you’re a board member, your responsibility is to get the best value for your shareholders.
In a press release, Twitter confirms Musks’s offer and states that “the Twitter Board of Directors will carefully review the proposal to determine the course of action that it believes is in the best interest of the Company and all Twitter stockholders.”
According to Bloomberg, Musk’s net worth is around $260 billion, while Twitter’s market valuation is $37 billion.