© Reuters. FILE PHOTO: Tesla CEO Elon Musk speaks at an event in Hawthorne, Calif., April 30, 2015.REUTERS/Patrick T. Fallon/File photo
2/2
Nivedita Baru
(Reuters) – Elon Musk said on Thursday he was ready to buy $46.5 billion in debt and equity financing twitter company (The NYSE ? and plans to make an offer directly to shareholders, filings with U.S. regulators show.
Musk himself has committed $33.5 billion, including $21 billion in equity and $12.5 billion in margin loans, to pledge some of his Tesla stock (NASDAQ ? Inc to fund the deal. He is the CEO of electric car maker Tesla.
Musk, the world’s richest man according to Forbes, made a “best and last” cash offer of $43 billion to Twitter’s board on April 14, saying the social media company should go private to grow and become a platform. for freedom of expression.
But Twitter did not respond to his proposal, instead taking a “poison pill” to stop it. Musk is also considering acquiring all of the company’s stock, but has not yet decided whether to do so, according to Thursday’s filing.
Elon Musk, Twitter’s second-largest shareholder with a 9.1 percent stake, said he could make big changes at the microblogging company with more than 80 million users.
Twitter shares rose less than 1% after the financing announcement, signaling that the market remained skeptical of the deal.
Tesla shares surged more than 3% after a strong quarterly report, with the value of Musk’s 172.6 million Tesla shares rising more than $5 billion on Thursday. On Wednesday, he was eligible for compensation in the form of stock options worth about $24 billion after Tesla hit its profit and revenue performance targets.
It is unclear whether Musk will sell Tesla shares to pay for the $21 billion equity financing. According to the margin loan commitment letter, Musk “may sell, assign or transfer” the unpledged Tesla stock at any time.
banks, including Morgan Stanley (NYSE: ), agreed to provide another $13 billion in debt guarantees for Twitter itself, according to the filing.
A Twitter spokesperson acknowledged receiving Musk’s offer.
“As previously announced and communicated directly with Mr. Musk, the Board of Directors is committed to conducting a careful, comprehensive and thoughtful review to determine the course of action it believes is in the best interests of the company and all Twitter shareholders,” Twitter said. The representative said in a statement.
Ryan Jacob, chief investment officer at Jacob Asset Management, which owns Twitter stock, said Musk’s latest filing will elicit a reaction from Twitter’s board.
“They have to consider the seriousness of the offer, and this document does that,” he said. “It’s hard for them to ignore it. »
Josh White, an assistant professor of finance at Vanderbilt University and a former SEC financial economist, said the funding “could put pressure on Twitter’s board to find a white knight, which is unlikely,” Or negotiate a higher value with Musk and take the poison pill out. »
Reuters reported this week, citing people familiar with the matter, that Musk’s proposal had attracted interest from private equity by participating in the Twitter deal.
Apollo Global Management (NYSE: Inc) is considering ways to fund any deal and is open to working with Musk or any other bidder, and Thoma Bravo has informed Twitter that he is considering a bid.
The New York Post said Thursday that Thoma Bravo is in talks with Musk about a joint deal. Thomas Bravo did not respond to a request for comment.
Musk has made numerous announcements on the platform, some of which have landed him in trouble with U.S. regulators.
In 2018, Musk tweeted that he had been “funded” to take Tesla private at $420 a share — a move that resulted in a multimillion-dollar fine and forced him to resign from the automaker The position of the chairman. . The SEC believes he defrauded investors.