Elon Musk said Thursday that he has invested $46.5 billion in debt and equity financing to buy Twitter Inc. and is considering taking his offer directly to shareholders, a filing with US regulators revealed. Is.
Musk himself has committed $33.5 billion, which will include $21 billion in equity and $12.5 billion in margin debt, to finance the transaction against some of his Tesla Inc. shares. He is the chief executive officer of electric vehicle maker Tesla.
Musk, the world’s richest man, presented Twitter’s board of directors on April 14 the “best and final” cash offer of $43 billion, according to a Forbes tally, calling for the social media company to grow and become a platform. needs to be private. for free speech.
But Twitter failed to respond to his offer and adopted a “poison pill” to thwart it. According to the filing Thursday, Musk is also considering a tender offer to buy all company stock from shareholders, but has not decided whether to do so.
Musk, Twitter’s second-largest shareholder with a 9.1% stake, has said he may be making major changes at the micro-blogging company, which has more than 80 million users.
Twitter shares rose less than 1% on news of the funding, indicating that the market is still skeptical about the deal.
Tesla shares climbed more than 3% on Thursday after a strong quarterly report and Musk’s 172.6 million Tesla shares were valued at more than $5 billion. On Wednesday, after hitting Tesla’s profit and revenue performance targets, he received what is now nearly $24 billion in compensation in the form of stock options.
It is unclear whether Musk will sell shares in Tesla to cover the $21 billion in equity financing. According to the margin loan commitment letter, Musk can “sell, dispose of or transfer” pledged Tesla shares at any time.
According to the filing, banks including Morgan Stanley have agreed to provide another $13 billion in loans secured against Twitter.
A Twitter spokesperson confirmed receipt of Musk’s offer.
“As previously announced and communicated directly to Mr. Musk, the Board is committed to conducting a careful, comprehensive and deliberate review to determine the course of action that it considers in the best interest of the Company and all Twitter stockholders.” The Twitter representative said in a statement.
Ryan Jacobs, chief investment officer at Jacob Asset Management, which owns Twitter shares, said Musk’s latest filing would prompt Twitter’s board to respond.
“They had to consider the seriousness of the proposal, and this filing can do that,” he said. “It will be hard for them to ignore it.”
Josh White, assistant professor of finance at Vanderbilt University and former financial economist for the Securities and Exchange Commission, said the funding will likely “put pressure on Twitter’s board to either find White Knight, which is unlikely, or to obtain Negotiate with Musk. A higher price and remove the poison pill.”
Musk’s offer has attracted private equity interest in participating in a deal for Twitter, Reuters reported this week, citing people familiar with the matter.
Apollo Global Management Inc. is looking at ways to provide financing for any deal and is open to working with Musk or any other bidder, while Thoma Bravo has informed Twitter that it will bid together. Looking for possibility to install.
The New York Post said Thursday that Thoma Bravo is in talks for a joint deal with Musk. Thoma Bravo did not respond to a request for comment.
Musk has made several announcements on stage, some of which have landed him in hot water with US regulators.
In 2018, Musk tweeted that he had a “funding secured” to take Tesla private for $420 per share — a move that led to a fine of millions of dollars and he was asked by the US to settle claims with the car company. was forced to step down as chairman. securities regulator that it defrauded investors.
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(Reporting by Nivedita Balu, Uday Sampath and Chawi Meta in Bengaluru, Hyunju Jin, Noel Randwich and Peter Henderson in San Francisco and Sheila Dang in Dallas; Writing by Anna Driver; Editing by Mark Porter, Rosalba O’Brien and Daniel Wallis)
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