Elon Musk Lands Historic LBO Deal Taking Twitter Public for $44 Million

Elon Musk agreed to buy Twitter Inc. for $44 billion through one of the biggest leveraged buyout deals in history to take Twitter private.

Investors will receive $54.20 for each Twitter shares, the company said in a statement on Monday. The price comes with a premium of 38% to the stock price closed on April 1- which is the last business day before Musk disclosed to public on his significant stake in the company.

Earlier in March Musk alleged the company’s algorithms are biased and feeds are cluttered with automated junk posts. He also said user growth is inflated by bots. He earlier rejected an invitation to join the company’s board, on April 14 he offered to take Twitter private, saying he’d make the platform a bastion of free speech and dropping other hints about the changes he’d make as owner.

“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 the statement on Monday.

“Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it.”

The deal was unanimously approved by the company’s board, and is expected to be completed later this year. Musk, the world’s richest person, secured $25.5 billion of debt and margin loan financing and will provide about $21 billion in equity to fund the deal, according to the statement.

Musk’s deal to buy Twitter includes a provision that the billionaire is required to pay the company a fee if he were to walk away or the deal falls apart, according to people familiar with the matter. The deal does not include a “go-shop provision,” meaning Twitter isn’t allowed to solicit offers from other potential bidders.

When they resumed trading after a halt for the news, Twitter shares jumped 5.7% to $51.70 at the close in New York.

Chief Executive Officer Parag Agrawal sent an email to Twitter employees as the news was announced, “I know this is a significant change and you’re likely processing what this means for you and Twitter’s future,” he wrote.

As part of the deal announcement, Twitter said it will report first-quarter earnings as planned on April 28 before the market opens in New York, but won’t host a call to discuss the results.

While the U.S. Securities and Exchange Commission will have to review the plan once Twitter files a preliminary proxy statement, the regulator doesn’t have the power to block the merger outright.