Elon Musk has clinched a deal to buy Twitter Inc for $US44 billion ($A61 billion) in a transaction that will shift control of the social media platform used by millions of users and global leaders to the world’s richest person.
The 16-year-old company has emerged as one of the world’s most influential public squares and now faces a string of challenges.
Musk has criticised Twitter’s moderation, calling himself a free-speech absolutist, said that Twitter’s algorithm for prioritising tweets should be public and criticised giving too much power on the service to corporations that advertise.
Political conservatives hope that a Musk regime would mean less moderation and reinstatement of banned individuals including former president Donald Trump.
Musk himself also has described user-friendly tweaks to the service, such as an edit button and defeating “spam bots” that send overwhelming amounts of unwanted tweets.
Discussions over the deal, which last week appeared uncertain, accelerated at the weekend after Musk wooed Twitter shareholders with financing details of his offer.
Under pressure, Twitter started negotiating with Musk to buy the company at the proposed $US54.20 per share price.
“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 in a statement on Monday.
Twitter shares rose 5.7 per cent on Monday to close at $US51.70. The deal represents a near 40 per cent premium to the closing price the day before Musk disclosed he had bought a more than nine per cent stake.
Even so, the offer is below the $US70 range where Twitter was trading last year.
Musk’s move continues a tradition of billionaires buying control of influential media platforms that include Rupert Murdoch’s takeover of the New York Post in 1976 and the Wall Street Journal in 2007 and Jeff Bezos’ 2013 acquisition of the Washington Post.
Twitter said Musk secured $US25.5 billion of debt and margin loan financing and is providing a $US21 billion equity commitment.
Musk, who is worth $US268 billion according to Forbes, has said he is not primarily concerned with the economics of Twitter.
“Having a public platform that is maximally trusted and broadly inclusive is extremely important to the future of civilisation. I don’t care about the economics at all,” he said in a recent public talk.
Musk is chief executive of electric car maker Tesla and aerospace company SpaceX, and it is not clear how he much time he will devote to Twitter.
Musk’s 80 million-strong Twitter account is seen as an important, free public relations tool for Tesla.
The Twitter transaction was approved by the board and is now subject to a shareholder vote. No regulatory hurdles were expected, analysts said.
Daniel Ives, an analyst at Wedbush, said the company’s board of directors had its back “against the wall” once Musk detailed his financing package and no other bidders or white knights emerged.
It was not immediately clear what the break-up fee would be or who would run the new company.
Twitter’s outsized importance as a mouthpiece for politicians, political dissidents and activists belies its relatively small size.
Although it is only about a tenth of the size of far larger social media platforms such as Meta Platforms’s Facebook, it has been credited with helping spawn the Arab Spring uprising and accused of playing a role in the January 6, 2021, storming of the US Capitol.