The Clap Elon Musk will take Twitter private after the company’s board unanimously approved the world’s richest man’s offer of almost $44 billion.
Backstory Earlier this month Musk disclosed a purchase of a 9.2% stake in Twitter, & was offered a seat as a board member, which he rejected. Less than a couple of weeks ago, he offered to buy the entire company. Twitter immediately adopted a “poison pill” defense plan to fend off hostile takeovers.
Elon’s plans Musk has criticized Twitter’s capacity for free speech, which he sees should be at the core of Twitter’s values. Musk, a (very) active Twitter user himself, believes he can unlock Twitter’s potential.
Why this matters The deal is one of the fastest & biggest leveraged buyout (LBO) deals in history. It took Musk around three weeks from first disclosing his 9.2% stake to closing the deal, & this was made possible due to him examining the company’s public financials only.
Claps Class A leveraged buyout is an acquisition that takes place using a significant amount of borrowed money to meet the cost of the acquisition.
Musk secured $25.5 billion in debt from several banks & $21 billion in equity from unrevealed sources, a move that brought relief to Tesla shareholders worried Musk would sell a stake in Tesla to fund the Twitter deal.