SAUDI Prince Alwaleed has bought a $300m (£193m) stake in social networking company Twitter, leading to speculation that the micro-blogging site is inching closer to a public offering.
However, it has been revealed that this transaction will not affect Twitter’s bank balance, as the shares were bought in a secondary purchase from existing stakeholders and not from the company itself.
It is likely that the news announced yesterday marks Twitter’s approval of the investment, while the bid would have been made as part of an $800m funding deal agreed in September, of which $400m was used to buy secondary shares.
With Twitter valued at around $9bn, this investment gives Alwaleed ownership of more than three per cent of the company.
Despite Twitter’s prominent role in the Arab Spring uprisings, Alwaleed denied that the move was political, insisting that he had purchased a “strategic stake”.
The Twitter holding, bought jointly by Alwaleed and his Kingdom Holding Co investment firm, resulted from “months of negotiations”, Kingdom said.
Alwaleed added: “Our investment in Twitter reaffirms our ability in identifying suitable opportunities to invest in promising, high-growth businesses with a global impact.”
Internet investment company DST Global, managed by Russian billionaire Yuri Milner, bought a five per cent stake in Twitter for $400m in August – half of which was purchased from existing shareholders.
The Saudi prince, who is the 26th richest man in the world and the wealthiest Arab, made the deal via his investment group Kingdom Holdings.
Alwaleed also holds minority stakes in News Corp, Citigroup, Apple, Time Warner and Walt Disney, and recently announced plans to launch a new privately-owned Arabic news channel.
He has also been publicly supportive of management, including the Murdochs at News Corp and Citigroup chief executive Vikram Pandit.