Musk brought forward an unsolicited bid to purchase Twitter for $54.20 a share in mid-April. At first, Twitter attempted to stop Musk's acquisition with a “poison pill,” a defense tactic used to prevent or discourage a potential hostile takeover
But Twitter's board of directors unanimously agreed to Musk’s offer on Monday afternoon (April 25). Twitter's independent board chair, Bret Taylor, said the board conducted “a thoughtful and comprehensive process” to assess the proposal, adding “we believe it is the best path forward for Twitter's stockholders.”
The news ends a nearly months-long dance between Twitter and Musk, who became the company’s largest shareholder on April 5 after buying 9% of the company’s stock and flirted with joining its board before offering to take the company private.
Musk has already proposed a string of changes to Twitter to make the platform “better than ever,” he said in a statement. He intends to roll out new features, make Twitter’s algorithms open source “to increase trust,” defeat spam bots and authenticate all humans.
“Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it,” Musk said in a statement.
Musk, who has more than 83.6 million followers on Twitter, had earlier said that if he succeeded in acquiring Twitter, he intended to relax the company’s moderation policies.
He echoed his thoughts towards prioritising free speech in his Monday statement: "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.”
In the U.S., lawmakers are speculating what Musk’s stance on free speech means for former President Donald Trump’s potential return to the platform.
The outspoken entrepreneur, who is the CEO of Tesla among other ventures, had also previously suggested several changes to Twitter’s premium subscription service, Twitter Blue. In a Twitter post earlier in April, he suggested the service should be priced less than the current $2.99 a month, should have “no ads” and should provide an option to pay in the cryptocurrency dogecoin.
Musk’s transaction to wholly own Twitter is expected to close in 2022, subject to the approval of Twitter stockholders, regulatory approvals and other customary closing conditions.
The deal comes after Twitter missed analyst estimates on earnings, revenue and user growth in its most-recent earnings for the fourth quarter of 2021. It was the first quarter under Parag Agrawal’s leadership as CEO, after Jack Dorsey stepped down from the role in November.
Advertisers spent $4.5 billion on Twitter in 2021, up from $3.2 billion in 2020.