Cover CEO of Tesla and Space X Elon Musk attends the 2015 Vanity Fair Oscar Party. (Photo: Getty Images)

Twitter shares jumped 5.7 per cent to US$51.70 after the news of Elon's Musk purchase deal was announced

This week, Elon Musk finally succeded in his bid to acquire Twitter with a US$44 billion (SG$60.5 billion) cash deal that will see the world’s richest person taking control of the social media platform. The deal is one of the biggest leveraged buyout deals in history and will take the 16-year-old platform private. 

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Musk, who is one of Twitter’s most-watched users with over 83 million followers, has been outspoken in the last few months in his criticism of Twitter’s management. He alleged that the company’s algorithms are biased and that feeds are cluttered with automated junk posts. He also made suggestions that Twitter’s user growth was inflated by bots.

On April 9, Musk revealed that he had taken a nine per cent stake in Twitter and that the company had invited him to join its board.

While it was initially something Musk and Twitter’s CEO, Parag Agrawal, were excited about, the offer did not work out in the end.

On April 14, Musk offered to take Twitter private and promised to make the platform one that celebrated free speech. He also suggested allowing users to edit their tweets and wanted to combat the spread of bots. He also suggested turning the company’s San Francisco headquarters into a homeless shelter.

The deal with approved by the company’s board this week and is expected to be completed later this year. 

“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.”

As the world’s richest person, Musk secured US$25.5 billion of debt and margin loan financing and will provide about US$21 billion in equity to fund the deal, according to the statement. 

In the deal, Musk agreed to pay the company a fee if he were to walk away or if the deal falls through, according to people familiar with the matter.

The deal does not include a “go-shop provision,” which means that Twitter isn’t allowed to solicit offers from other potential bidders.

After halting for the news, trading resumed and Twitter shares jumped 5.7 per cent to US$51.70 at the close in New York.

While Musk has yet to reveal concrete plans about changing Twitter’s policies around speech and content moderation, his acquisition of the company will mean that he has taken responsibility for the issue.

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