Elon Musk on Thursday said he has lined up $46.5 billion in debt and equity financing to buy social networking company Twitter and is considering taking his offer directly to shareholders, a filing with US regulators showed.
Musk himself has committed to putting up $33.5 billion, which will include $21 billion of equity and $12.5 billion of margin loans against some of his Tesla shares to finance the transaction. Musk is the chief executive officer of the automotive company Tesla.
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, Twitter’s second-largest shareholder with a 9.1% 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 up less than 1% on news of the funding, indicating that the market is still sceptical about the deal, given that Twitter is expected to reject him on price.
Shares of Tesla climbed 8% in late morning trade, lifted by better-than-expected earnings at the electric vehicle maker.
Banks, including Morgan Stanley, have agreed to provide another $13 billion in debt secured against Twitter itself, according to the filing.
Twitter was not immediately available for comment.
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, 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 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 US 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 US securities regulator that he defrauded investors.