Elon Musk, the tech tycoon, is moving forward with his prospective acquisition of Twitter, stating that he has secured $46.5 billion in funding for a possible tender offer.
The funding was revealed in a filing with the Securities and Exchange Commission on Thursday. The financing includes promises from Morgan Stanley and other financial institutions, according to Musk’s filing. According to the document, Musk has not yet determined whether to launch a tender offer for Twitter (buying shares directly from current investors), but he may take other moves to forward the potential takeover.
According to the filing, Musk is “considering whether to initiate a tender offer to buy all outstanding shares of [Twitter’s] Common Stock” for $54.20 per share, but “has not resolved whether to do so at this time.”
Musk, the CEO of Tesla and SpaceX and the world’s richest man, suggested buying Twitter for $43 billion in a hostile takeover last week, offering $54.20 a share for the social media business. To ward off a potential hostile takeover, Twitter implemented a “poison pill” strategy last Friday, which prevents any individual or entity from collecting more than a 15% ownership in the firm by purchasing shares on the open market.
According to a report filed on Thursday, Musk is considering making a tender offer for Twitter “given the lack of reaction by Twitter” to his prior buyout bid.
“[W]e don’t believe [the funding] brings Musk any closer to an agreement, given: “The extra poison pill presents a more tough background,” CFRA Research analyst Angelo Zino said in a note on Thursday, citing “1) our opinion that the board likely wishes to avoid selling to Musk, and 2) the added poison pill makes a more challenging backdrop.” “We believe Musk might expand his investment in TWTR to closer to 15% to put further pressure on the stock, but we believe he will need to have productive interactions with the board to be effective.”
Musk said earlier this month that he had purchased 9.2 percent of Twitter’s stock, making him the company’s largest stakeholder. The eccentric billionaire agreed to join Twitter’s board of directors on the condition that he owns no more than 14.9 percent of the company’s stock. Musk then changed his mind and opted not to join the board of directors, but not before making the unwelcome attempt to take Twitter private.
To read our blog on “Twitter Is Funding Research In To a Decentralized Version Of Its Platform,” click here.
