Billionaire Tesla and SpaceX boss Elon Musk has agreed a $44 billion [£34.5 billion] deal to take over social networking site, Twitter.
Musk, who already owns a 9.2 per cent stake in the business, first made an unsolicited offer for Twitter on April 14, which was initially rebuffed by the board.
However, after talks over the weekend which continued into Monday, the board unanimously approved Musk’s bid after details of the financing emerged, and shareholders will now be asked to vote in favour of the sale.
Musk financed the deal with $21 billion from his own assets, and a further $25.5 billion in backing from various financial institutions. His estimated net worth according to Forbes stands at $268.2 billion at the time of writing.
Chair of the Twitter board, Bret Taylor, commented that paving the way for the takeover would be “the best path forward for Twitter's stockholders” after the deal was struck.
After the deal was announced, Twitter shares on Monday closed more than five per cent higher in value but remained below Musk’s offer of $54.20 per share.
Twitter ended 2021 with $5 billion in revenue and boasting 217 million daily users worldwide. Although its performance pales in comparison to some of its counterparts in the social networking world, Musk has previously talked up its “tremendous potential” and his wish to use Twitter as a forum for free speech.
In a statement confirming the deal, Musk said: “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.
“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.”
Musk’s acquisition of the company comes at a time when regulation of the content appearing on the platform has come under immense scrutiny. In one of its most notable moves, the social networking site suspended the account of former US president Donald Trump, citing risks of “incitement of violence” around his tweets.
Musk has his own controversial history on the site, after US financial regulators accused him of misleading Tesla investors with some of his tweets in 2018. The dispute was resolved by a $40 million settlement, but Musk denies any wrongdoing to this day.
Yet, prior to the announcement of the deal, Musk also tweeted: “I hope that even my worst critics remain on Twitter, because that is what free speech means.”
Writing on Twitter following the deal’s announcement, chair of the UK’s Digital, Culture, Media and Sport Committee, Julian Knight MP called the deal an “extraordinary development in the world of social media” and said it would be interesting to see how a champion of free speech would “react to global moves to regulate”.
Following the takeover, shares in Twitter will be de-listed and the company will go private, which Musk says will offer him the freedom to make changes behind the scenes.
There could also be a reshuffle within the company’s leadership, after Musk stated in his offer document that he did not “have confidence” in its current management team.
Twitter is currently headed by Parag Agrawal, who took over following the resignation of co-founder and CEO, Jack Dorsey, in November last year.
Agrawal himself told Reuters following the approval of Musk’s bid that the site's future was uncertain, stating: “Once the deal closes, we don't know which direction the platform will go.”
Image taken from Wikimedia Commons
