Funding secured: Elon Musk confirms a $46.5 billion financing commitment to acquire 100% of Twitter
Last week, Elon Musk made a $41.39 billion cash offer to buy Twitter. It didn’t take long before Twitter’s Board of Directors adopted a “poison pill” strategy to block Musk from taking over the social media platform.
The “poison pill,” as it’s called in corporate terms, gives Twitter’s existing shareholders time to purchase additional shares at a discount, thereby diluting Elon Musk’s ownership stake in the company. But now Musk is taking the fight directly to Twitter shareholders.
According to a new securities filing with SEC, Musk has secured a $46.5 billion financing commitment to acquire Twitter Inc and is considering starting a tender offer for its outstanding shares. Musk also confirmed he has secured about $25.5 billion in debt financing from Morgan Stanley and several other banks plus $21 billion of his own money. The other participating firms are Bank of America, Barclays, MUFG, Societe Generale, Mizuho Bank and BNP Paribas.
“To finance the Proposed Transaction or a Potential Offer, entities related to the Reporting Person have received commitment letters committing to provide an aggregate of approximately $46.5 billion.”
Item 4 of the Schedule 13D is amended and restated in the SEC filing reads:
“On April 13, 2022, the Reporting Person delivered a letter to the Issuer (the “Letter”) which contained a non-binding proposal (the “Proposal”) to acquire all of the outstanding Common Stock of Twitter not owned by the Reporting Person for all cash consideration valuing the Common Stock at $54.20 per share (the “Proposed Transaction”).”
The filing also revealed that Musk has not yet determined if he will make a tender offer for Twitter or whether he will take other steps to further the proposal.
Meanwhile, a Twitter spokesperson confirmed the company received 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 spokesperson said in a statement.
It all started on March 26 when Musk hinted at launching his own social media platform due to Twitter’s failure to promote free speech. Then in a follow-up tweet, Elon Musk told his 79 million Twitter followers that he’s giving “serious thought” to the idea of creating his own social media platform. The revelation came after Musk’s friend Pranay Pathole asked in a tweet if Musk would consider building a new social media platform.
Musk, 50, polled his more than 80 million followers on Twitter last month, asking them whether the company adheres to the principles of free speech. After more than 70% said no, he asked whether a new platform was needed and said he was giving serious thought to starting his own.
Earlier today, Musk said he will commit to make Twitter’s algorithm open source if the bid were to succeed. The revelation comes after Musk responded to a tweet from his friend Pranay Pathole.
In his tweet, Pathole said:
“@elonmusk’s Twitter bid succeeds, he will focus on solving the real problems. Make platform’s algorithm open source, eliminate horrible scam bots, edit functionality, strict adherence to free speech, simpler verification process.”
Musk later responded with a “Yes.”
— Elon Musk (@elonmusk) April 22, 2022