Entrepreneur Elon Musk is ready to buy Twitter.
On Thursday, The Hollywood Reporter shared the news that the Tesla founder had said that he had secured the funds to purchase Twitter in a new security filing on Thursday. Musk said that he is weighing a tender offer to acquire Twitter for $54.20 per share.
Elon Musk Claims He Has The Funds To Purchase Twitter
If Musk decides to go through with his tender offer, he would offer to buy any shares of Twitter for $54.20, or for an even higher price. Shareholders can decide whether to take the offer or to retain their shares. If a majority of shareholders accept Musk’s offer, he can effectively take control of the social media company.
However, Twitter has recently adopted a “poison pill” defense as a safeguard against any potential takeover. This approach forces Musk and any other potential buyers to negotiate with the Twitter board of directors if they plan to accept the offer.
In the filing, the SpaceX founder said that he is prepared to negotiate with Twitter’s board of directors to secure the company.
“The Reporting Person is seeking to negotiate a definitive agreement for the acquisition of Twitter by the Reporting Person and is prepared to begin such negotiations immediately,” the filing read.
Musk’s attempt to buy Twitter, which seems to be named “Project X” according to the filing, is being financed by “two debt commitment letters led by Morgan Stanley and backed by other institutions, as well as an equity commitment letter, in total raising about $46.5 billion,” according to THR.
Elon Musk Claims Buying Twitter Is ‘Not A Way To Make Money’
At a TED conference on April 14, Musk said that he wanted to purchase Twitter to open source the algorithm.
He said that the social media service had “become kind of the de facto town square, so it is just really important that people have the reality and the perception that they are able to speak freely within the bounds of the law.”
“This is not a way to make money, my strong intuitive sense is that having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilization,” he added. “I don’t care about the economics at all.”
Although Musk began quietly buying up shares in Twitter in late January, he did not disclose his shares until April 4, when he purchased over nine percent of the company and sent the stock soaring. Musk is currently facing a lawsuit from Twitter investors who claim that Musk did not disclose when he obtained a five percent stake in the company, as required by the SEC, which cost him profits.
At that point, Twitter CEO Parag Agrawal offered Musk a seat on the Board of Directors. In exchange, Musk could not purchase a more than 14.9% stake in the company. A few days later, Musk ultimately rejected the offer. A few days after that, he sent text messages to board director Bret Taylor, saying that he wanted to purchase the company.
Elon Musk Says He Will ‘Unlock’ Twitter’s Potential
“Since making my investment, I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company,” Musk wrote in the text messages, which were published in a recent securities filing.
“Twitter has extraordinary potential,” he added. “I will unlock it.”
At the TED conference, Musk said that he had a “Plan B” if he was unable to acquire Twitter, but it is not clear what that plan is. It has been speculated that Musk plans to start his own social media company but nothing has been confirmed at this time.
