Elon Musk announced on Thursday that he has obtained $46.5 billion in loan and stock finance to buy Twitter Inc and is considering pushing his proposal directly to shareholders, according to a statement filed with US regulators.
Musk has agreed to put up $33.5 billion in cash and $12.5 billion in margin loans on some of his Tesla Inc shares to fund the purchase. He is the founder and CEO of Tesla, an electric automobile company.
Musk, the world's richest man, reportedly made a "best and final" cash offer of $43 billion to Twitter's board of directors on April 14, arguing that the social media company needs to be taken private in order to expand and ne made into a platform that would allow for free speech, according to Forbes.
Twitter, on the other hand, turned down his offer and employed a "poison pill" to irritate him. Musk is also considering a tender offer to buy all of the company's equity from shareholders, according to the filing on Thursday, but has yet to decide.
With a 9.1 per cent ownership in Twitter, Musk has intimated that the microblogging company, where he has a following of more than 80 million people, may experience big changes.
Twitter's shares rose less than 1 per cent after the money was announced, indicating that the market is still wary about the deal.
Tesla shares soared more than 3 per cent on Thursday, and the value of Musk's 172.6 million Tesla shares increased by more than $5 billion, following a strong quarterly report.
Tesla qualified for compensation in the form of stock options after meeting profit and revenue targets on Wednesday, which are currently valued nearly $24 billion.
Musk has not stated if he intends to sell Tesla stock to cover the $21 billion equity transaction. Musk "may sell, dispose of, or transfer" unpledged Tesla stocks at any time, according to a margin loan commitment agreement.
Banks, including Morgan Stanley, have agreed to provide another $13 billion in loans secured against Twitter, according to the petition.
According to a Twitter representative, Musk's request was received.
"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," Twitter representative said in a statement.
According to Ryan Jacob, chief investment officer of Jacob Asset Management, which holds Twitter stock, Musk's latest filing will compel Twitter's board to respond.
"They had to consider the seriousness of the offer, and this filing may do that," he said. "It's going to be hard for them to ignore it."
According to Josh White, an assistant professor of finance at Vanderbilt University and a former financial economist for the Securities and Exchange Commission, the funding would "put pressure on Twitter's board to either locate a White Knight, which seems unlikely, or engage in negotiations with Musk to get a higher value for the company and remove the poison pill."
According to people familiar with the issue, Musk's bid has spurred private equity interest in a Twitter purchase, according to Reuters.
Apollo Global Management Inc is looking at ways to fund any acquisition and is open to engage with Musk or any other bidder, while Thoma Bravo announced on Twitter that it is working on a proposal.
According to the New York Post, Thoma Bravo and Musk are discussing a joint venture. Thoma Bravo did not respond to a request for comment.
Musk has made a number of statements on the platform, some of which have landed him in hot water with US regulators.
Musk tweeted in 2018 that he had "funding secured" to take Tesla private for $420 per share, a move that led in millions of dollars in fines and his forced resignation as Tesla's chairman to settle allegations that he defrauded investors from the US Securities and Exchange Commission.
(Source:www.business-standard.com)
Musk has agreed to put up $33.5 billion in cash and $12.5 billion in margin loans on some of his Tesla Inc shares to fund the purchase. He is the founder and CEO of Tesla, an electric automobile company.
Musk, the world's richest man, reportedly made a "best and final" cash offer of $43 billion to Twitter's board of directors on April 14, arguing that the social media company needs to be taken private in order to expand and ne made into a platform that would allow for free speech, according to Forbes.
Twitter, on the other hand, turned down his offer and employed a "poison pill" to irritate him. Musk is also considering a tender offer to buy all of the company's equity from shareholders, according to the filing on Thursday, but has yet to decide.
With a 9.1 per cent ownership in Twitter, Musk has intimated that the microblogging company, where he has a following of more than 80 million people, may experience big changes.
Twitter's shares rose less than 1 per cent after the money was announced, indicating that the market is still wary about the deal.
Tesla shares soared more than 3 per cent on Thursday, and the value of Musk's 172.6 million Tesla shares increased by more than $5 billion, following a strong quarterly report.
Tesla qualified for compensation in the form of stock options after meeting profit and revenue targets on Wednesday, which are currently valued nearly $24 billion.
Musk has not stated if he intends to sell Tesla stock to cover the $21 billion equity transaction. Musk "may sell, dispose of, or transfer" unpledged Tesla stocks at any time, according to a margin loan commitment agreement.
Banks, including Morgan Stanley, have agreed to provide another $13 billion in loans secured against Twitter, according to the petition.
According to a Twitter representative, Musk's request was received.
"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," Twitter representative said in a statement.
According to Ryan Jacob, chief investment officer of Jacob Asset Management, which holds Twitter stock, Musk's latest filing will compel Twitter's board to respond.
"They had to consider the seriousness of the offer, and this filing may do that," he said. "It's going to be hard for them to ignore it."
According to Josh White, an assistant professor of finance at Vanderbilt University and a former financial economist for the Securities and Exchange Commission, the funding would "put pressure on Twitter's board to either locate a White Knight, which seems unlikely, or engage in negotiations with Musk to get a higher value for the company and remove the poison pill."
According to people familiar with the issue, Musk's bid has spurred private equity interest in a Twitter purchase, according to Reuters.
Apollo Global Management Inc is looking at ways to fund any acquisition and is open to engage with Musk or any other bidder, while Thoma Bravo announced on Twitter that it is working on a proposal.
According to the New York Post, Thoma Bravo and Musk are discussing a joint venture. Thoma Bravo did not respond to a request for comment.
Musk has made a number of statements on the platform, some of which have landed him in hot water with US regulators.
Musk tweeted in 2018 that he had "funding secured" to take Tesla private for $420 per share, a move that led in millions of dollars in fines and his forced resignation as Tesla's chairman to settle allegations that he defrauded investors from the US Securities and Exchange Commission.
(Source:www.business-standard.com)
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