How Twitter Ranks in Largest Take-Private Deals
Twitter has a deal to sell itself to Elon Musk for $54.20 per share, valuing the social media giant at around $44 billion. If successful, Musk’s Twitter takeover would be the largest take-private deal since Dell bought data storage company EMC for $67 billion in 2016, according to PitchBook data.
Investors tout going private as a way for companies to execute a turnaround effort that’s out of the public eye. These deals are often spearheaded by groups of private equity firms with financing from investment banks.
The Twitter deal stands out because Musk’s wealth is the bedrock of the financing.
The Tesla CEO is providing $21 billion in equity and has access to an additional $25.5 billion through debt and margin loan financing. Musk’s potential plans for Twitter include paring back its content moderation policies, moving the algorithm to an open-source model and fighting spam bots.
Take-private activity hit a high-water mark in 2007 and has yet to return to its pre-global financial crisis levels. Last year, $116 billion worth of take-private deals were completed, the most since 2016, according to PitchBook data.
Musk flirted with taking Tesla private in 2018 at $420 per share, valuing it at an estimated $72 billion. READ: Elon Musk Becomes Twitter’s Largest Shareholder
That deal flamed out and resulted in Musk paying $20 million to the SEC and stepping down from the Tesla board. (In hindsight, it would have been a prime deal: The automaker’s market capitalization is now about $1 trillion.). How Twitter Ranks in Largest Take-Private Deals