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SAN FRACISCO: Elon Musk said he has lined up $46.5 billion in debt and equity financing to buy Twitter and is considering taking his offer directly to shareholders.
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 shares to finance the transaction.
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. read more
Twitter failed to respond to his offer and adopted a “poison pill” to thwart him. 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 could make big changes at the micro-blogging company, where he has a following of more than 80 million users.
Shares of Tesla climbed more than 3% and the value of Musk’s 172.6 million Tesla shares rose by over $5 billion on Thursday following a strong quarterly report. 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. 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.