Elon Musk has clinched a deal to buy Twitter Inc (NYSE:TWTR) for $44 billion in a transaction that will shift control of the social media platform to the billionaire Tesla Inc (NASDAQ:TSLA) boss.
In a statement from Twitter announcing the agreement, 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."
Under the terms of the agreement, Twitter stockholders will receive $54.20 in cash for each share of Twitter common stock that they own upon closing of the proposed transaction.
The purchase price represents a 38% premium to Twitter's closing stock price on April 1, 2022, which was the last trading day before Musk disclosed an approximately 9% stake in Twitter.
Bret Taylor, Twitter's independent board chair, added: "The Twitter Board conducted a thoughtful and comprehensive process to assess Elon's proposal with a deliberate focus on value, certainty, and financing. The proposed transaction will deliver a substantial cash premium, and we believe it is the best path forward for Twitter's stockholders."
The social media company said the transaction, which has been unanimously approved by its board, is expected to close in 2022, subject to the approval of Twitter stockholders, the receipt of applicable regulatory approvals and the satisfaction of other customary closing conditions.
Parag Agrawal, Twitter's CEO, commented: "Twitter has a purpose and relevance that impacts the entire world. Deeply proud of our teams and inspired by the work that has never been more important."
Twitter noted that Musk has secured $25.5 billion of fully committed debt and margin loan financing and is providing an approximately $21.0 billion equity commitment. There are no financing conditions to the closing of the transaction, it added.
Twitter also said it plans to release its first-quarter fiscal year 2022 results before market open on April 28, 2022, but in light of the pending transaction announced today, said it will not hold a corresponding conference call.
Discussions over the deal, which last week appeared uncertain, accelerated over the weekend after Musk wooed Twitter shareholders with financing details of his offer. The deal ends Twitter's run as a public company since its 2013 initial public offering.
In late afternoon trading in New York, shares in Twitter were up 6% to US$51.88.
In an immediate reaction to the news, analysts at Wedbush said: "It all came down to no other bidders or white knights emerging in the M&A process and Twitter's Board back was against the wall once Musk detailed his $46 billion in financing last week to get pen to paper on this deal.
"We do not expect any major regulatory hurdles to the deal getting done as this soap opera now ends with Musk owning Twitter. The Board got some extra time with the poison pill but ultimately had to get to the negotiation table with Musk to get this deal done as the clock struck midnight on Twitter's history as a public company."