Saudi Arabian investor Prince Alwaleed bin Talal said on Thursday that as one of the major shareholders in Twitter he rejected a takeover bid by billionaire entrepreneur Elon Musk.
“I don’t believe that the proposed offer by Elon Musk ($54.20 per share) comes close to the intrinsic value of Twitter given its growth prospects”Prince AlWaleed
Musk took aim at Twitter Inc with a $43 billion cash takeover offer on Thursday, with the Tesla CEO saying the social media giant needs to be taken private to grow and become a platform for free speech.
“The Twitter Board of Directors will carefully review the proposal to determine the course of action that it believes is in the best interest of the Company and all Twitter stockholders,” the micro-blogging platform said in a statement.
Earlier in the day, Musk made an offer to buy 100 per cent of Twitter at $54.20 per share, a 54 per cent premium over the closing price of Twitter on January 28, 2022, the trading day before Musk began investing in the company.
This is a 38 per cent premium over the closing price of Twitter on April 1, 2022, the trading day before Musk’s investment in Twitter was publicly announced.
“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” Musk said in the filing.
“However, since making my investment I now realise the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.”
I made an offer https://t.co/VvreuPMeLu— Elon Musk (@elonmusk) April 14, 2022
In a letter to Twitter’s board, Musk said he believes Twitter “will neither thrive nor serve societal imperative in its current form”.
“If the deal doesn’t work, given that I don’t have confidence in management nor do I believe I can drive the necessary change in the public market, I would need to reconsider my position as a shareholder,” he added.
Earlier this week, Twitter CEO Parag Agrawal announced that Musk will not join the board of the company, saying that “he believes it is for the best”.
The Indian-origin CEO last week said the micro-blogging platform has appointed Musk to its board of directors.
Musk, who acquired 9.2 per cent share in the micro-blogging platform for nearly $3 billion, is limited from buying more than 15 per cent of Twitter’s stock.
Saudi Arabia’s Prince Alwaleed bin Talal rejected Elon Musk’s bid, saying the deal doesn’t “come close to the intrinsic value” of the popular social media platform.
It’s not known how large the billionaire Prince’s investment is in Twitter, but a 2015 regulatory filing showed that Alwaleed, along with his Kingdom Holding Company, owned a 5.2% stake in the social media platform.
The prince was detained at the Ritz-Carlton hotel in Riyadh for nearly three months in late 2017 along with other Saudi princes in an anti-corruption sweep started by the de facto Saudi ruler and Crown Prince Mohammed Bin Salman, which was largely seen as a move to consolidate power.
Alwaleed is worth $16.5 billion, according to the Bloomberg Billionaires Index. Most of his wealth is derived from his 95% ownership of Kingdom Holding Company.
Twitter’s shares fluctuated on Thursday as investors weighed news of the offer. The stock was up 2.1% at 1:25 p.m. in New York.