Billionaire Elon Musk is proposing to go ahead with his original $54.20 a share offer to take Twitter Inc private, two sources with knowledge of the matter said on Tuesday, sending shares of the social media firm soaring. .
Shares of Twitter grew 22.26%, to 52.01 dollars, which would be equivalent to a market capitalization gain of 7,239 million dollars, while those of Tesla Inc, the electric vehicle company that Musk directs, rose 2.9% to remain at a price of 249.44 dollars.
The deal puts the world’s richest person at the helm of one of the most influential media platforms and ends months of turbulent litigation, which has damaged Twitter’s brand and raised questions about Musk’s erratic behavior.
Musk made the proposal in a letter to Twitter, Bloomberg first reported, basing his information on people who asked not to be identified.
Twitter and Musk’s lawyers were not immediately available for Reuters requests for comment.
The news comes ahead of a much-anticipated showdown between Musk and Twitter in Delaware Court on Oct. 17, in which the social media company was to seek an order forcing Musk to close the deal at $54.20 per share.
“This is a clear sign that Musk recognized, as the Delaware trial looms, that the chances of winning against Twitter’s board were highly unlikely and that this $44 billion deal was going to be completed one way or the other.” another,” Wedbush analyst Dan Ives wrote in a note following the news.
Musk agreed in April to buy Twitter for $44 billion; however, within weeks it said the number of bot accounts was far higher than Twitter’s estimate of less than 5% of users.
“This news would be a relief to Twitter’s long-suffering shareholders. The company’s shares rose on the latest takeover opportunity from its opening level this morning at $42.54 to close at $52, but remain below the price April bid price of $54.20. Musk has been active on Twitter since 2009 and has 108 million followers,” said Ben Laidler, global markets strategist at social investment network eToro.
With information from Reuters