On Monday the board of Twitter agreed to a $44bn takeover offer from the billionaire Elon Musk, a transaction that shifts control of Twitter to the world’s richest person.
Mr Musk, initially made a bid less than two weeks ago, stating Twitter had “tremendous potential” that he would unlock. The Twitter board initially offered a spot on the board for Mr Musk, however that board position also carried the downside of limiting his stake in twitter to no more than 14.9%.
However Mr Musk declined the board position opting for a strategy of buying the company outright and declaring his intentions to o so. The response by twitters board was to enact a poison pill strategy, where any attempt to gain more equity by Mr Musk, would see his equity position diluted.
Since then Twitter’s board have found a way to reconcile their opposition to this deal, and Twitter agreed to sell itself to Mr. Musk for $54.20 a share, a 38 percent premium over the company’s share price this month before he revealed he was the firm’s single largest shareholder. It would be the largest deal to take a company private.
The deal, which has been unanimously approved by Twitter’s board, is expected to close this year, subject to a vote of Twitter shareholders and certain regulatory approvals.
Mr Musk is the world’s richest person, according to Forbes magazine, with an estimated net worth of $273.6bn mostly due to his shareholding in electric vehicle maker Tesla which he runs. He also leads the aerospace firm SpaceX.
“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,” Mr Musk said in a statement announcing the deal.
“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,” he added.
“Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it.”