© Reuters. FILE PHOTO: The Twitter app is seen on a smartphone in this illustration taken July 13, 2021. REUTERS/Dado Ruvic/Illustration/File Photo
By Greg Roumeliotis
NEW YORK (Reuters) -Elon Musk clinched a deal to buy Twitter Inc (NYSE:) for $44 billion cash on Monday in a transaction that will shift control of the social media platform populated by millions of users and global leaders to the world’s richest person.
It is a seminal moment for the 16-year-old company that emerged as one of the world’s most influential public squares and now faces a string of challenges.
Discussions over the deal, which last week appeared uncertain, accelerated over the weekend after Musk wooed Twitter shareholders with financing details of his offer.
Under pressure, Twitter started negotiating with Musk to buy the company at the proposed $54.20 per share price.
“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 a statement.
Shares were up about 6% following the news. The deal represents a near 40% premium to the closing price the day before Musk disclosed he had bought a more than 9% stake. Even so, the offer is below the $70 range where Twitter was trading last year.
The transaction was approved by the board and is now subject to a shareholder vote.
In a prepared statement the company said Musk secured $25.5 billion of debt and margin loan financing and is providing a $21 billion equity commitment.
It was not immediately clear what the breakup fee would be or who would run the new company.
Twitter’s outsized importance as a mouthpiece for politicians, political dissidents and activists belies its relatively small size.
Although it is only about a tenth of the size of far larger social media platforms like Meta Platforms Inc’s Facebook (NASDAQ:), it has been credited with helping spawn the Arab Spring uprising and accused of playing a role in the Jan. 6, 2021, storming of the U.S. Capitol.
After Twitter banned former President Donald Trump over concerns around incitement of violence following last year’s U.S. Capitol attack by his supporters, Musk tweeted: “A lot of people are going to be super unhappy with West Coast high tech as the de facto arbiter of free speech.”
Republicans on Monday cheered the news of a possible Musk buyout of Twitter, betting on Trump’s reinstatement on the service.
Trump, whose company is building a rival to Twitter called Truth Social, said he will not return to Twitter, according to a Fox News interview.