Elon Musk’s offer to buy 100 percent of Twitter was publicly rejected by Saudi Arabian billionaire Prince Alwaleed bin Talal, a shareholder in the site through his investing firm Kingdom Holding Company.
Musk offered $43 billion in cash to take over the site on Thursday, but Prince Alwaleed said that his offer fails to represent the long-term value of Twitter.
“I don’t believe that the proposed offer by @elonmusk ($54.20) comes close to the intrinsic value of @Twitter given its growth prospects,” Prince Alwaleed said.
“Being one of the largest & long-term shareholders of Twitter, @Kingdom_KHC & I reject this offer,” he added.
Prince Alwaleed’s firm was a very early investor of Twitter, investing $300 million in the company for a 3 percent stake in December 2011 before the firm listed on the New York Stock Exchange in 2013. The Prince later increased his stake in Twitter through a Kingdom Holding purchase in 2015, and now owns more than 5 percent of the firm.
Musk replied to Alwaleed’s offer rejection asking, “How much of Twitter does the Kingdom own, directly & indirectly?”
The Tesla and SpaceX founder’s offer price of $54.20 a share came shortly after Musk announced that he would reject a seat on Twitter’s board.
Musk currently owns 9.1 percent of the company, and his offer would represent a 38 percent premium on the Twitter’s share price when Musk’s holdings were made public on April 1.
In response to Musk’s purchase offer, Twitter’s share price fell, closing Thursday’s trading down 1.7 percent to around $45 – significantly lower than the billionaire’s proposed purchase price. Typically, when a buyout offer is launched, stock prices will trade at or near the proposed purchase price if investors think the sale is likely.
Later on Thursday, asset management giant Vanguard Group announced that they had increased their holding of Twitter to 82.4 million shares, or 10.3 percent of the company, making Musk now the firm’s second-largest shareholder.
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