Elon Musk has made a $41.4 billion approach to acquire Twitter just days after rejecting a seat on the company’s board, as he threatened to reconsider his position as its top shareholder if the offer is rejected.
A regulatory filing to the SEC revealed Musk had made an offer of $54.20 per share to take the company private, 38 per cent higher than the closing price of its stock on 1 April.
The date is the last day of trading before Musk’s 9.2 per cent stake in the company was publicly announced.
Musk’s investment led to Twitter’s share price soaring and the billionaire was then offered a seat on the company’s board, which he looked set to take.
However, a dramatic U-turn saw Musk reject the offer, with Twitter CEO Parag Agrawal stating he believed the decision was “for the best”, while adding the company would remain open to his input.
Best and final offer
Musk clearly had other ideas than merely providing input.
In a letter to Twitter chair Bret Taylor included in the latest SEC filing, Musk explained since making his investment he had realised the company “will neither thrive nor serve this societal imperative in its current form” and it needed to be transformed as a private company.
“Twitter has extraordinary potential. I will unlock it,” Musk proclaimed.
Musk further stated his bid “is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder”.
Interestingly, Musk would have been prohibited from owning more than 14.9 per cent of Twitter’s common stock as an individual or part of a group if he had accepted the board seat for the two year duration of the post and 90 days after.
By rejecting the offer of a seat, he has been able to launch the hostile takeover.
In another twist, Musk was hit with lawsuits by former Twitter shareholders who argue they missed out on a higher price because the billionaire had failed to disclose his holdings in the company by the time required by federal law.