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Elon Musk bear hugs Twitter with $43 billion buyout bid

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Elon Musk is all in on Twitter, offering roughly $43 billion to buy out the public company and take it private. The world’s richest man already owns 9.2% of Twitter and is the company’s largest shareholder.

According to an SEC filing, Musk would pay $54.20 per share, which is an 18% premium over Wednesday’s share price and a 38% premium over the share price of the company the day before Musk’s 9.2% stake became public.

In a notice to Twitter board chairman Bret Taylor, Musk wrote that the offer “is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder.”

The buyout proposal comes after Musk declined a seat on the board this past week, which was offered to him after he bought 9.2% of the company and declared interest in influencing operations. The appointed board seat would have prevented Musk from owning more than 14.9% of the company. He rejected the seat the morning his appointment was to take effect.

“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” Musk told Taylor. “However, 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’s over-value offer is what’s known as a bear hug, where a company or person offers to buy the shares of a target company at a price much higher than what it is worth on the market. Because the targeted company–in this case Twitter–is obligated to do what’s in the best interest of shareholders, it makes it difficult for management to reject the offer.

At roughly $43 billion dollars, the amount Musk is offering is about 16% of his personal net worth.

SIMONE DEL ROSARIO: THE WILDEST, MOST DRAMATIC BUSINESS STORY OF THE MONTH HAS TAKEN A MAJOR TURN.

ELON MUSK, WHO ALREADY OWNS 9.2% OF TWITTER, HAS NOW OFFERED TO BUY THE WHOLE THING.

ACCORDING TO AN SEC FILING, MUSK WOULD PAY $54.20 A SHARE AND TAKE TWITTER PRIVATE.

THAT’S AN 18% PREMIUM OVER WEDNESDAY’S SHARE PRICE…AND A 38% PREMIUM OVER THE SHARE PRICE THE DAY BEFORE EVERYONE FOUND OUT MUSK TOOK A MAJOR STAKE IN THE COMPANY.

THE DEAL COMES OUT TO ABOUT 43 BILLION DOLLARS. WHICH IS ABOUT 16% OF HIS NET WORTH.

THE WORLD’S RICHEST MAN SAYS IT’S HIS “BEST AND FINAL OFFER.” AND IF NOT ACCEPTED, HE’D NEED TO RECONSIDER HIS POSITION AS TWITTER’S LARGEST SHAREHOLDER.

THE BUYOUT PROPOSAL COMES AFTER MUSK DECLINED A SEAT ON THE BOARD, AFTER BUYING 9.2% OF THE COMPANY. THE BOARD SEAT WOULD HAVE PREVENTED HIM FROM MAKING AN OFFER LIKE THIS.

MUSK TOLD THE BOARD CHAIRMAN I BELIEVE IN TWITTER’S POTENTIAL TO BE THE PLATFORM FOR FREE SPEECH AROUND THE GLOBE…BUT THE COMPANY SHOULD BE PRIVATE TO GO THROUGH THE CHANGES THAT NEED TO BE MADE.

IN NEW YORK FOR JUST BUSINESS I’M SIMONE DEL ROSARIO.

Elon Musk is all in on Twitter, offering roughly $43 billion to buy out the public company and take it private. The world’s richest man already owns 9.2% of Twitter and is the company’s largest shareholder.

According to an SEC filing, Musk would pay $54.20 per share, which is an 18% premium over Wednesday’s share price and a 38% premium over the share price of the company the day before Musk’s 9.2% stake became public.

In a notice to Twitter board chairman Bret Taylor, Musk wrote that the offer “is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder.”

The buyout proposal comes after Musk declined a seat on the board this past week, which was offered to him after he bought 9.2% of the company and declared interest in influencing operations. The appointed board seat would have prevented Musk from owning more than 14.9% of the company. He rejected the seat the morning his appointment was to take effect.

“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” Musk told Taylor. “However, 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’s over-value offer is what’s known as a bear hug, where a company or person offers to buy the shares of a target company at a price much higher than what it is worth on the market. Because the targeted company–in this case Twitter–is obligated to do what’s in the best interest of shareholders, it makes it difficult for management to reject the offer.

At roughly $43 billion dollars, the amount Musk is offering is about 16% of his personal net worth.

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