Elon Musk May Set Aside $15 Billion Of His Own Money To Help Finance His $43 Billion Twitter Bid.
• Elon Musk is said to be scrambling to put together a bid for Twitter.
• Musk may be willing to set aside up to $15 billion of his own money to help finance a buyout, according to a New York Post report on Tuesday, citing two unnamed sources.
Despite his wealth, Musk requires financial assistance from banks or other investors to complete such a large transaction.
He’ll have to deal with Twitter’s “poison pill” defense as well.
Elon Musk is said to be scrambling to put together a bid for Twitter.
Musk may be willing to set aside up to $15 billion of his own money to help finance a buyout, according to a New York Post report on Tuesday, citing two unnamed sources.
According to the New York Post, he’s also asked Morgan Stanley to assist him in raising another $10 billion in debt, to launch a tender offer in about 10 days. Separately, the New York Times reported on Wednesday that Morgan Stanley is assisting Musk in obtaining debt rather than equity financing for his initial bid. According to a filing with the SEC last Wednesday, the bank is advising Musk.
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The billionaire, whose net worth was estimated to be $261 billion as of Wednesday by Bloomberg, is likely to require significant financial assistance to pull off such a large transaction.
The Financial Times reported on Wednesday that some major buyout firms, including Blackstone Group, Vista Equity Partners, and Brookfield Asset Management, had declined to provide Musk with equity.
Twitter’s long-term growth and profitability prospects, as well as Musk’s maverick persona, are among their reported concerns. The billionaire has been vocal about his plans for the platform, which include loosening content moderation and not paying board members.
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According to the newspaper, other institutions are considering debt or preferred equity financing.
Reuters and the Wall Street Journal reported earlier this week that some investors, including Apollo Global Management and Thoma Bravo, have expressed interest in participating in a bid for Twitter.
Musk has not publicly stated how he intends to fund his proposed acquisition of Twitter. According to a US Securities and Exchange Commission filing on April 14, the Tesla CEO made an unsolicited offer to buy Twitter outright for $54.20 per share, valuing a potential deal at $43 billion. On April 15, he stated that he has sufficient assets to fund the buyout without providing further details.
Musk and Tesla did not respond immediately to Insider’s inquiries. Morgan Stanley did not respond immediately to Insider.
Insider inquiries were not immediately responded to by Blackstone Group or Vista Equity Partners. A spokesperson for Brookfield Asset Management declined to comment.
The billionaire, whose net worth was estimated to be $261 billion as of Wednesday by Bloomberg, is likely to require significant financial assistance to pull off such a large transaction.
Even if Musk can put together a formal bid, he will still have to deal with Twitter’s “poison pill,” a defense mechanism put in place by the board to prevent an investor from acquiring more than 15% of the company.
Once an investor, such as Musk, crosses that threshold, the plan would allow all other shareholders to exercise their rights to buy a portion of Twitter’s shares at a $210 exercise price as of April 25, thereby diluting the larger investor’s stake.
Musk is currently Twitter’s largest individual shareholder, with a stake in the company equal to 9.1 percent of the company.
