SAN FRANCISCO ― Elon Musk said he has lined up $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 showed.
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 shares to finance the transaction. He is chief executive officer of electric vehicle maker 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, saying the social media company needs to be taken private to grow and become a platform for free speech.
But Twitter failed to respond to his offer and adopted a “poison pill” to thwart him. Musk also is considering a tender offer to buy all company stock from shareholders but has not decided whether to do so, according to the filing on Thursday.
Musk, Twitter’s second-largest shareholder with a 9.1% stake, has said he could make big changes at the micro-blogging company, where he has a following of more than 80 million users.
Shares of Twitter rose less than 1% on news of the funding, indicating that the market is still skeptical about the deal.
Shares of Tesla climbed more than 3% and the value of Musk’s 172.6 million Tesla shares rose by over $5 billion Thursday following a strong quarterly report. On Wednesday, he qualified for compensation in the form of stock options now worth about $24 billion after Tesla hit profit and revenue performance targets.
It is unclear whether Musk would sell shares in Tesla to cover the $21 billion equity financing. Musk “may sell, dispose of or transfer” unpledged Tesla stocks at any time, according to a margin loan commitment letter.
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 according to Reuters.
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