NEW YORK: Elon Musk clinched a deal to buy Twitter Inc for $44 billion cash on Monday in a transaction that will shift control of the social media platform populated by millions of users and global leaders to the world’s richest person.

It is a seminal moment for the 16-year-old company that emerged as one of the world’s most influential public squares and now faces a string of challenges.

Discussions over the deal, which last week appeared uncertain, accelerated over 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 $54.20 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.

Shares were up about six percent following the news. The deal represents a near 40 percent premium to the closing price the day before Musk disclosed he had bought a more than nine percent stake. Even so, the offer is below the $70 range where Twitter was trading last year.

The transaction was approved by the board and is now subject to a shareholder vote.

In a prepared statement the company said Musk secured $25.5 billion of debt and margin loan financing and is providing a $21 billion equity commitment.

It was not immediately clear what the breakup fee would be or who would run the new company.

The 50-year-old Elon Musk, who is also CEO of rocket developer SpaceX, has said he wants to combat trolls on Twitter and proposed changes to the Twitter Blue premium subscription service, including slashing its price and banning advertising.

The billionaire, a vocal advocate of cryptocurrencies, has also suggested adding dogecoin as a payment option on Twitter.

Up to the point Musk disclosed a stake in Twitter in April, the company’s shares had fallen about 10pc since Parag Agrawal took over as CEO from founder Jack Dorsey in late November.

Outsized importance

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 like Meta Platforms Inc’s Facebook, it has been credited with helping spawn the Arab Spring uprising and accused of playing a role in the Jan 6, 2021, storming of the US Capitol.

After Twitter banned former president Donald Trump over concerns around incitement of violence following last year’s Capitol attack by his supporters, Musk tweeted: “A lot of people are going to be super unhappy with West Coast high tech as the de facto arbiter of free speech.”

Republicans on Monday cheered the news of a possible Musk buyout of Twitter, betting on Trump’s reinstatement on the service.

Published in Dawn, April 26th, 2022