Elon Musk seeks to put in less money in new Twitter deal financing: Report – Times of India

Elon Musk is in talks with massive funding companies and excessive net-worth people about taking over extra financing for his $44 billion acquisition of Twitter and tying up much less of his wealth within the deal, folks conversant in the matter stated.
Musk is the world’s richest particular person, with Forbes estimating his internet price at about $245 billion. But most of his wealth is tied up within the shares of Tesla, the electrical automotive maker he leads. Final week, Musk disclosed he offered $8.5 billion price of Tesla inventory following his settlement to purchase Twitter. learn extra
The brand new financing, which may come within the type of most well-liked or widespread fairness, may scale back the $21 billion money contribution that Musk has dedicated to the deal in addition to a margin mortgage he secured towards his Tesla shares, the sources stated.
The banks that agreed final month to offer $13 billion in loans based mostly on Twitter’s enterprise balked at providing extra debt for Musk’s acquisition given the San Francisco-based firm’s restricted money stream, Reuters reported final month.
Musk has additionally pledged a few of his Tesla shares to banks to rearrange a $12.5 billion margin mortgage to assist fund the deal. He could search to trim the scale of the margin mortgage based mostly on the brand new investor curiosity within the deal financing, one of many sources stated.
Main traders resembling personal fairness companies, hedge funds and excessive net-worth people are in talks with Musk about offering most well-liked fairness financing for the acquisition, the sources stated.
Most popular fairness would pay a set dividend from Twitter, in the identical method {that a} bond or a mortgage pays common curiosity however would respect in keeping with the fairness worth of the corporate.
Apollo International Administration Inc and Ares Administration Corp are among the many personal fairness companies which have been in talks about offering the financing, the sources added.
Musk remains to be deciding whether or not he can have companions crew up with him in writing the fairness test wanted for the deal, the sources stated. Musk is just not in search of to tackle extra debt for the Twitter deal at the moment, the sources added.
Musk has additionally been in talks with a few of Twitter’s main shareholders about the potential for them rolling their stake into the deal quite than cashing out, one of many sources stated.
Former Twitter chief government and present board member Jack Dorsey is inspecting whether or not he’ll roll his take, one supply added.
Massive institutional traders, resembling Constancy, are additionally in talks about rolling over their stake, in line with the supply.
Musk has tweeted that he would attempt to maintain as many traders in Twitter as doable as he takes the corporate personal.
The sources requested anonymity as a result of the matter is confidential. Musk, Dorsey, Constancy, Apollo and Ares didn’t reply to requests for remark.
Tesla shares ended buying and selling on Monday in New York up 3.7% at $902.94. Wedbush Securities managing director Dan Ives stated the information helped ease traders’ issues that Musk was relying an excessive amount of on his Tesla shares for the Twitter deal financing.
“That is massive if it materializes as we imagine the Twitter deal has been a $100+ per share overhang on Tesla’s inventory because of the Musk financing issues,” Ives tweeted.
Buyers have been fretting over whether or not Musk will full the Twitter deal provided that he has backtracked previously.
In April, he determined on the final minute to not take up a seat on Twitter’s board. In 2018, Musk tweeted that there was “funding secured” for a $72 billion deal to take Tesla personal however didn’t transfer forward with a proposal.
Twitter shares ended buying and selling up 0.2% at $49.14 in New York on Monday, nearer to the $54.20 per share acquisition value, as traders interpreted the information on the brand new financing discussions as making it barely extra seemingly that the deal will shut.
Musk must pay a $1 billion termination charge to Twitter if he walked away, and the social media firm may additionally sue him to finish the deal.
Musk, who calls himself a free speech absolutist, has criticized Twitter’s moderation insurance policies. He desires Twitter’s algorithm for prioritizing tweets to be public and objects to giving an excessive amount of energy on the service to companies that publicize.

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