Elon Musk has Secured $46.5 Billion in Financing to Buy Twitter
In the takeover battle for the short message service Twitter, a formal offer from Tesla boss Elon Musk to all shareholders is getting closer. This emerges from a message from Musk to the Securities and Exchange Commission SEC on Thursday. The billionaire justifies this with the lack of an answer from the group’s management to his takeover bid. But he hasn’t made a decision yet.
In the same release, Musk also writes that he has secured a total of $46.5 billion in financing for the acquisition. 25.5 billion of these are loan commitments from a banking consortium led by Morgan Stanley. The Tesla boss wants to bring in the remaining $21 billion through treasury shares.
Elon Musk is the richest person in the world. His fortune is currently estimated at around $282 billion. A large part of the values result from his company investments. Musk currently has about $3 billion in cash or other liquid assets, according to Bloomberg calculations, having spent $2.6 billion for about 9.2 percent of Twitter’s stake in recent months.
Even after the announcement of the financing commitments, investors doubt that Musk will reach his goal: Twitter shares were up 0.7 percent in early US trading at just around $47. Musk offered $54.20 per share in his non-binding offer.
Competition for Twitter would also be possible
Twitter said in a statement, “The Board of Directors is committed to conducting a careful, comprehensive and considered review to determine what course of action it believes is in the best interests of the company and all Twitter shareholders.”
The billionaire, who already owns around nine percent of the shares in the social network, recently announced that it wanted to take over the entire company for around $43 billion. He would then like to take Twitter off the stock exchange. Morningstar analyst Ali Mogharabi said, “If Musk’s offer is rejected, he could still seek to raise the capital to create a similar social media platform to compete with Twitter.”
The supervisory board of the US group has launched a so-called “poison pill” to defend itself against the hostile takeover. The poison pill kicks in when an individual or group acquires at least 15 percent of Twitter’s outstanding common stock without board approval.
Then the other shareholders have the opportunity to purchase additional shares at a discount. That would make a takeover difficult. The rule should apply for one year.
Elon Musk has Secured $46.5 Billion in Financing to buy Twitter - /10