Monday, May 23

Elon Musk announces that he already has 46.5 billion in cash to buy Twitter

Elon Musk has told the US stock market regulator that he already has the $46.5 billion in cash to take full control of Twitter and that he is considering doing so through a hostile takeover bid (OPA). The tycoon has reached an agreement with a group of investment banks to provide him with the necessary capital to face the operation. His intention is to be solely responsible for the social network and take it out of the stock market.

Elon Musk becomes the largest shareholder of Twitter

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Musk, a regular user of Twitter and one of the profiles that accumulates the most followers on the platform with more than 82 million, became the majority shareholder in early April after taking 9.2% of the shares. At first he accepted the position on the board of directors offered by the company’s current management, but on the day he was to be officially appointed he rejected the proposal, announced that he did not trust the board and submitted an offer of 43,000 million of dollars to buy the entire company.

Twitter has defended itself with a “poison pill,” a measure that allows the board to flood the market with below-market shares, available to any buyer except Musk. The management of the social network has not officially rejected the tycoon’s offer, although it has not been put to a vote by the shareholders either. as requested the co-founder of Paypal, Tesla or SpaceX.

In its communication to the regulator, Musk affirms that he does not rule out launching a hostile takeover bid and taking his offer directly to shareholders or starting a negotiation with Twitter management to accept the offer. This offered a premium of 38% on the value of the shares when the businessman became a shareholder, but it is notably lower than the highest value that the shares of the social network reached in February 2021, when they reached 77 dollars ( Musk is now offering $54 a share.)

In addition to Musk, the largest shareholders of Twitter are large investment fund managers such as Vanguard or BlackRock (the two largest companies of this type in the world), the investment bank Morgan Stanley or the Saudi prince Al Waleed Bin Talal. “I don’t think the proposed offering comes close to the intrinsic value of Twitter given its growth prospects. I reject this offer.” tweeted Al Waled.

Among the investment banks that will lend their support to the 50-year-old tycoon to launch himself on Twitter is also Morgan Stanley, which is the one that will put the most money on the table. The group also includes Bank of America, Barclays, MUFG, Societe Generale, Mizuho Bank and BNP Paribas.

The social network has not positioned itself regarding the new communication from Musk, the richest man in the world according to Forbes. “As previously announced and communicated to Mr. Musk directly, the Board is committed to conducting a careful, thorough and deliberate review to determine the course of action it believes is in the best interest of the company and all stakeholders. shareholders of Twitter”, explains a spokeswoman in a statement sent to

Musk’s offer surprised even mainstream analysts, as Twitter has barely made a profit over the past decade and struggles to grow its user base and make it profitable. Musk has stated that his interest lies in its “potential to be the platform for freedom of expression around the world”: “I have a very strong intuition that having a highly trusted and widely inclusive public platform is extremely important for the future. of civilization. I don’t care about the financial aspect at all.”