Elon Musk says he’s secured $46.5 billion in financing for his Twitter bid, an important disclosure seemingly meant to ease concerns about his commitment to the idea.
Over $20 billion would come from varying loans from Morgan Stanley, according to a new SEC filing. Another $21 billion will come from equity financing.
Musk has not yet made a formal tender offer for Twitter, but it may come soon now that Musk has given more details about how he’d finance a deal. While Musk possesses a fortune worth more than $260 billion, nearly all of it is tied up in Tesla stock and other illiquid assets. He’ll need to borrow money as well as possibly sell Tesla shares to make the deal work.
Musk says he has not heard from the Twitter board since going public with his $54.20 a share proposal a week ago. While Musk has hired Morgan Stanley to advise him, Twitter has retained Goldman Sachs and JPMorgan.
The SEC filling notably leaves out anyone but Musk. A slew of Wall Street firms, including Apollo and Thoma Bravo, had reportedly been interested in joining the financing around the Twitter transaction. It seems like they’ve lost interest and won’t be joining Musk in his bid for Twitter.
Twitter has worked to guard itself as best it can from Musk. Last Friday, its board adopted a poison pill, a corporate mechanism that’ll let it sell deeply discounted stock to shareholders and reduce Musk’s stake. But Twitter lacks the stronger defense other tech companies enjoy against hostile takeovers. It doesn’t have the same type of dual-share classes as Meta, Alphabet and Snap, which firmly keep places control of those companies with their founders and CEOs.
But it’s been unclear how serious Musk was about his Twitter bid, the consequence of a his famous joke offer to privitize Tesla in 2018. The initial lack of details about how he’d finance the acquisition added to the confusion. (Investors proposing unsolicited takeovers usually take great pains from the start over these numbers, knowing investors may be unfamiliar with them and reluctant.) Within Twitter, employees and other company insiders over the last week have tried to ignore Musk and hoped the whole thing might go away as quickly as it descended over them. CEO Parag Agrawal urged patience at a short all-hands meeting last meeting Friday.
As part of a totally unconventional style of corporate warfare, Musk has twice made cryptic tweets about tender offers in the last few days. One referenced the Elvis Presley song “Love Me Tender,” the other, the F. Scott Fitzgerlad novel Tender is the Night. Combined, they receive more than a half-million Likes, a sign of Musk’s immense following on Twitter (82 million) as well as his ability to win over public support for his idea.
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