Twitter has accepted billionaire Elon Musk’s $44 billion takeover bid, the company announced on Monday.
Musk will pay $54.20 a share for
(ticker: TWTR) in cash, representing a 38% premium to the stock’s closing price on April 1, the day before Musk disclosed a 9% stake in the social media company.
Upon completion of the transaction, expected, sometime this year, Twitter will become a privately held company.
The news comes one day after Twitter’s board of directors and the
(TSLA) chief executive met to hash out details of the proposal.
“The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing,” said Bret Taylor, Twitter’s independent board chair. “The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter’s stockholders.”
Musk has secured $25.5 billion of fully committed debt and margin loan financing and is providing approximately $21 billion equity commitment, Twitter 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,” Musk said. “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.”
Shares of Twitter climbed to $51.80, up 5.9% on the day, in late afternoon trading.
Twitter was largely expected to rebuff Musk’s offer. The company’s board went so far as to adopt a so-called poison pill to thwart Musk’s proposal. But Twitter grew more receptive to the bid after Musk said last week that he has the funding to take Twitter private.
Twitter’s coming earnings report, scheduled for Thursday, may have affected the deal’s timeline.
Wedbush analyst Dan Ives said Twitter’s earnings “likely will not be rainbows and smiles thus putting further pressure on the company around this game of high stakes poker with the Musk bid looming.”
Analysts surveyed by FactSet expect Twitter to post a first-quarter profit of 5 cents a share on revenue of $1.23 billion. A year earlier, Twitter earned 16 cents a share on revenue of $1.04 billion.
Coming into Monday trading, the stock has risen more than 13% this year, including a gain of nearly 7% since Musk launched his bid.
—Luisa Beltran contributed to this article
Write to Joe Woelfel at [email protected]