Musk says he has received $46.5 billion in funding for Twitter’s offer and is considering making his offer directly to shareholders, a filing with U.S. regulators revealed.
Musk itself has committed to putting up $33.5 billion, including $21 billion in equity and $12.5 billion in margin lending against some of its Tesla Inc (TSLA.O) shares to fund the transaction. He is chief executive officer of electric vehicle manufacturer Tesla.
Musk, the world’s richest person according to a count by Forbes, presented a “best and final” cash offer of $43 billion to Twitter’s board of directors on April 14, saying the social media company must be taken private to grow. and become a platform for free speech, Reuters reported.
But Twitter did not respond to his offer and took a “poison pill” to thwart him. Musk is also considering an offer to buy all of the company’s shares from shareholders, but has not yet decided whether he will do so, according to Thursday’s filing, according to Reuters.
Musk, Twitter’s second-largest shareholder with a 9.1% stake, has said he could make big changes at the microblogging company, where he has more than 80 million users.
Shares of Twitter rose less than 1% on news about the financing, indicating that the market is still skeptical about the deal.
Shares of Tesla were up more than 3% and the value of Musk’s 172.6 million Tesla shares rose more than $5 billion on Thursday after a strong quarterly report. On Wednesday, he qualified for compensation in the form of stock options that are now worth about $24 billion after Tesla met its profit and revenue targets.
It is unclear whether Musk would sell shares in Tesla to cover the $21 billion equity financing. Musk may “sell, dispose or transfer” uncommitted Tesla stock at any time, according to a margin loan commitment letter.
Banks, including Morgan Stanley, have agreed to provide an additional $13 billion in debt secured from Twitter itself, according to the filing.
A Twitter spokesperson confirmed receipt of Musk’s proposal.
“As previously announced and communicated directly to Mr. Musk, the board is committed to conducting a careful, comprehensive and considered assessment to determine the course of action it believes is in the best interest of the company and all Twitter shareholders Twitter said. representative said in a statement.
Ryan Jacob, chief investment officer at Jacob Asset Management, which owns Twitter stock, said Musk’s latest filing would prompt Twitter’s board to respond.
“They had to consider the seriousness of the offer, and this submission can do that,” he said. “It will be hard for them to ignore it.”
Josh White, an assistant professor of finance at Vanderbilt University and a former financial economist for the Securities and Exchange Commission, said the funding would likely “put pressure on Twitter’s board to either find a White Knight, which is unlikely, or to negotiate with Musk a higher value and remove the poison pill.”
Musk’s offer has sparked private equity interests to join a deal for Twitter, Reuters reported this week, citing people familiar with the matter.
Apollo Global Management Inc (APO.N) is considering ways to fund each deal and is open to partnering with Musk or another bidder, while Thoma Bravo has informed Twitter that it is exploring the possibility of making a bid.
The New York Post said Thursday that Thoma Bravo was in talks with Musk for a joint deal. Thoma Bravo did not respond to a request for comment.
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 “secured funding” to take Tesla private for $420 a share — a move that led to millions of dollars in fines and he was forced to resign as chairman of the auto company over claims from the US. to resolve securities regulator that he has defrauded investors.
† Reuters
