Elon Musk, the richest man in the world, will buy Twitter for 44 billion dollars (41 billion euros). The social network’s board of directors finally accepted his offerMonday, April 25, after resisting his attacks.
“I hope even my worst critics stay on Twitter, because that’s what free speech means”, said on Twitter the boss of the car company Tesla and the space company SpaceX. Known for his libertarian beliefs, Elon Musk, 50, says he buys the company in the name of freedom of expression: « [Elle] is the foundation of a functioning democracy and Twitter is the digital public square where issues vital to the future of humanity are discussed,” explains the one who wants to take the company out of the stock market to be sole master on board.
The South African-born entrepreneur offers to buy back the shares at a price of $54.20 in cash, a premium of 38% compared to the 1is April, the day he revealed that he had acquired 9% of the company’s capital over time.
At that time, the action had not progressed by a dollar on the stock market since its introduction on Wall Street in 2013. It was this weak performance that made the situation of the supervisory board of Twitter, social network untenable. 90% dependent on and unable to develop a satisfactory economic growth model, despite its 217 million daily users.
The case immediately took a political turn
“Skeptics who didn’t see the deal coming on Twitter initially underestimated Elon Musk’s fighting spirit and ability to secure funding. Second, they have not understood the risk aversion of boards of directors, which are afraid of being sued or of appearing incompetent if they do not act in the best interests of shareholders”summarized Gary Black, boss of the hedge fund (hedge fund) from Chicago, The Future Fund.
It was unlikely to find a White Knight at such a price or expect a quick rally in the stock on its own. As for the poison pill that the board wanted to use to prevent Elon Musk from rising beyond 15% of the capital by creating new shares, it was difficult to justify.
Aided by investment bank Morgan Stanley, Elon Musk raised $25.5 billion in loans, while he could raise up to $21 billion in personal funds. “The proposed transaction will provide a substantial cash premium, and we believe it is the best way forward for Twitter shareholders,” conceded the chairman of the social network’s supervisory board, Bret Taylor.
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