World News

Musk secures $46.5 bln in funding for Twitter bid

Tesla CEO Elon Musk looks on as he visits the construction site of Tesla’s gigafactory in Gruenheide, near Berlin, Germany, May 17, 2021. REUTERS/Michele Tantussi/File Photo

April 21 – Elon Musk on Thursday said he has lined up $46.5 billion in debt and equity financing to buy social network company Twitter Inc and is considering taking his offer directly to shareholders, a filing with U.S. regulators showed.



*Cover your face with masks to prevent transmission of droplets carrying coronavirus
*Exercise social distancing
*Wash your hands frequently
*Sanitize your hands



Musk himself has committed to put up $33.5 billion, which will include $21 billion of equity and $12.5 billion of margin loans against some of his Tesla Inc. (TSLA.O) shares to finance the transaction. He is chief executive officer of automotive company Tesla.


Azadi Ka Amrit Celebrations India

Musk, the world’s richest person according to a tally by Forbes, on April 14 presented a “best and final” cash offer of $43 billion to Twitter’s board of directors.



Musk’s latest move comes after Twitter failed to respond to his offer and adopted a “poison pill” to thwart the billionaire’s effort to buy the social media platform.

Musk, Twitter’s second-largest shareholder with a 9.1 percent stake, has said that he could make big changes at the micro-blogging company, where he has a following of more than 80 million users.

Shares of Twitter were down less than 1% on news of the funding, indicating that the market is still skeptical about the deal, given that Twitter is expected to reject him on price.

Shares of Tesla climbed nearly 7% in midday trade, lifted by better-than-expected earnings at the electric vehicle maker.

Musk holds 172.6 million shares in Tesla, the latest regulatory filing shows. On Wednesday, he qualified for compensation in the form of stock options now worth about $25 billion after Tesla hit a triplet of profit and revenue performance targets. read more

It is unclear whether Musk would sell his stocks in Tesla to cover the $21 billion equity financing.

Banks, including Morgan Stanley, have agreed to provide another $13 billion in debt secured against Twitter itself, according to the filing.

A spokesperson for Twitter acknowledged receipt of Musk’s proposal.

“As previously announced and communicated to Mr. Musk directly, the board is committed to conducting a careful, comprehensive and deliberate review to determine the course of action that it believes is in the best interest of the company and all Twitter stockholders,” the Twitter representative said in a statement.

“I suspect it will put pressure on Twitter’s board to either find a White Knight, which is unlikely, or negotiate with Musk to obtain a higher value and remove the poison pill,” said Josh White, assistant professor of finance at Vanderbilt University and a former financial economist for the Securities and Exchange Commission.

Musk, a self-described “free speech absolutist,” has said that the social media company needs to be taken private to grow and become a platform for free speech.

The offer from Musk has drawn private equity interest in participating in a deal for Twitter, Reuters reported, citing people familiar with the matter.

Apollo Global Management Inc (APO.N) is considering ways it can provide financing to any deal and is open to working with Musk or any other bidder, while Thoma Bravo has informed Twitter that it is exploring the possibility of putting together a bid. read more

Musk has made a number of announcements on the platform, including some that have landed him in hot water with U.S. regulators.

In 2018, Musk tweeted that he had “funding secured” to take Tesla private for $420 per share – a move that led to millions of dollars in fines and him being forced to step down as chairman of the electric car company to resolve claims from the U.S. securities regulator that he defrauded investors.

Reporting by Nivedita Balu, Uday Sampath and Chavi Meta in Bengaluru; Hyunjoo Jin and Noel Randewich in San Francisco; Writing by Anna Driver; Editing by Anil D’Silva and Mark Porter

Our Standards: The Thomson Reuters Trust Principles.


APRIL 21, 2022

Categories: World News

Tagged as: ,

Leave a Reply