Billionaire and free speech defender Elon Musk reportedly secured a massive fortune in commitments from investment groups to buy Twitter from its liberal leadership, a new twist in Musk’s hostile takeover bid. There may be 46.5 billion reasons for the Twitter board to reconsider a possible offer by Musk.
Musk filed an SEC document on April 20 that revealed that he obtained financing for Twitter. Entities related to the Reporting Person were given commitment letters, committing to pay approximately $46.5 million in total to finance the Proposed Transaction. Commentator Trish Regan reacted to the announcement on Twitter: “BREAKING: @ElonMusk ups the stakes — says he has commitment letters and funding lined up to now purchase Twitter for **$46.5** Billion.” She later added that “[t]It is becoming increasingly difficult for him. [the] board to turn down.” She also noted that Musk received assistance from “a group of banks led by Morgan Stanley,” warning, “Translation: THIS GUY IS SERIOUS.”
CNBC summarized the nature of the updated SEC filing in an April 21 piece: “Musk said that given the lack of response from Twitter’s board, he is now exploring a tender offer to purchase some or all shares of the company directly from its shareholders.” The outlet also observed that“Musk has secured about $25.5 billion in debt financing through Morgan Stanley Senior funding and other firms.” The firms included: “Bank of America, Barclays, MUFG, Societe Generale, Mizuho Bank and BNP Paribas.”
Musk was able to secure funding from large sources in order to overhaul Twitter for free speech.
Donna Hitscherich, a Columbia Business School professor, reportedly explained the situation to The Washington Post that Musk’s move “‘signals an increasing level of seriousness.’” She added that “‘You’re ratcheting up the resolve with the hopes that at one point the other side will come to the table.’”
Some sources predicted that Musk would attempt to conquer Twitter again through a group of investors, rather than an individual. “Elon Musk is speaking to investors who could partner with him on a bid for Twitter,” according to the New York Post (NY Post(April 15). “One possibility, the sources said: teaming with private-equity firm Silver Lake Partners, which was planning to co-invest with him in 2018 when he was considering taking Tesla private.” The NY Post then noted that “Silver Lake’s Co-CEO Egon Durban is a Twitter board member” who “led Musk’s deal team during the 2018 failed effort to take Tesla private.”
The NY PostMusk also stated that he would heavily depend on the financial power of allies to help him realize his multibillion-dollar dream of a Twitter buyover.
“Nevertheless, it’s mainly outside financing that will carry the bid for Musk, who has tapped Morgan Stanley to raise another $10 billion in debt against Twitter in the manner of a traditional leveraged buyout, the sources said.”
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