Elon Musk said Thursday he had pledges worth $46.5 billion to fund his proposed offer on Twitter and was investigating whether he would launch a hostile takeover for the company.
In documents filed with the Securities and Exchange Commission, Mr. Musk said he was considering making his offer directly to Twitter shareholders — a so-called takeover offer — without the approval of Twitter’s board.
Last week, Mr. Musk, the world’s richest man, made an unsolicited offer for the social media company, saying he wanted to keep it private and that he wanted people to speak more freely about the service. His offer was viewed with skepticism at the time because he did not provide details about how he would get the money for the deal.
Offering specific details about his funding could further pressure Twitter boards to take Mr. Musk’s offer seriously.
A Twitter spokesperson confirmed that the company had received the updated proposal. “As previously announced and communicated directly to Mr. Musk, the board of directors is committed to conducting a careful, comprehensive and considered assessment to determine the course of action it believes is in the best interests of the company and all of Twitter’s shareholders. said the spokesman. said.
Twitter is likely to go into more detail about Mr. Musk’s offer when it reports its quarterly results on April 28.
Mr. Musk’s offer is supported by a mix of debt and cash. Investment bank Morgan Stanley and a group of other lenders are offering $13 billion in debt financing and another $12.5 billion in loans against Mr. Musk’s Tesla stock. Mr. Musk is expected to add approximately $21 billion in equity financing.
Shares of Twitter had changed little in early trading Thursday at around $47, below Mr. Musk’s bid of $54.20 a share, suggesting investors are still not convinced a deal will materialise. closed at that price.
Mr. Musk said he would continue to review his investment in Twitter, which could mean buying or selling more shares. While the Twitter board has not turned down Mr Musk’s offer, it has responded with a defensive tactic known as a “poison pill.” If Mr. Musk buys more than 15 percent of the company, Twitter would flood the market with new shares that all shareholders except Mr. Musk could buy at a discount. Mr. Musk has built a more than 9 percent stake in Twitter, which at one point made him the largest shareholder in the company.
The poison pill that Twitter announced has a so-called “last look” provision, which gives the company a 10-day window to decide whether or not to activate the provision should Mr. Musk exceed the 15 percent threshold. It’s very rare for a potential buyer to activate a poison pill, but Mr. Musk is famously unpredictable.
What will happen to Elon Musk’s bid on Twitter?
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The offer. Elon Musk, the world’s richest man, made an unsolicited offer of more than $43 billion for the social media company. Mr. Musk said he wanted to turn Twitter into a private business and that he wanted people to be able to speak more freely about the service.
The 50-year-old billionaire had hinted for days that he planned to increase his stake by making an offer. In recent days, he’s been tweeting clear references to his next step in the takeover battle, mentioning the Elvis Presley ballad “love me tenderly” and the novel by F. Scott Fitzgerald”Tender is the night†
Mr. Musk’s habit of tweeting obscure but market-moving information has kept Twitter’s advisers on their toes throughout the takeover saga. They have been keeping a close eye on his Twitter account as they prepared for the possibility of a hostile bid, two people familiar with the matter told DailyExpertNews.
For Mr. Musk, offering details of acquisition financing could serve as a form of redemption. In 2018, Mr. Musk attempted to take Tesla private, tweeting that he had “secured funding,” driving Tesla shares higher. He had not prepared funding for such a deal. The SEC later filed a lawsuit against him for securities fraud, accusing him of misleading investors. Mr. Musk paid a $20 million fine and agreed to serve as Tesla chairman for three years.
A deal for Twitter, as Mr. Musk envisioned, would be the largest leveraged buyout in decades.
Kate Conger contributed coverage.