Elon Musk would have the financing for a bid on Twitter. He coughs up just under half of the $46 billion himself.
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The poison pill that the management of Twitter used last week against the hostile takeover attempt of Elon Musk does not deter the South African entrepreneur. He persevered and announced in a statement how he intends to finance the offer, which is estimated at $46 billion.
He has a deal with some investment banks, including Morgan Stanley, to cover $26 billion of the $46 billion in loans. Morgan Stanley is assisted in this lending by many other major banks, including Bank of America, Barclays, BNP Paribas and Société Générale. Musk himself would fund 21 billion dollars. To do this, he may have to sell or pledge some of his Tesla shares. It is estimated that he only has about $3 billion in cash.
No official offer yet
Musk does not have to fear that a sale of Tesla shares will lead to a fall in the stock price. The stock rose 8 percent on Thursday after excellent quarterly figures. Tesla suffers much less than other automakers from parts shortages, so that sales and profits were better than expected.
Thanks to the excellent quarterly figures, Musk also achieves the profit targets, which means that he acquires billions of Tesla options. He once again receives cheap Tesla shares. The stock market rally also means that Musk has to sell or pledge fewer Tesla shares in order to raise $21 billion.
There is no official offer on Twitter yet. Musk is likely to make a tender offer, buying shares directly from Twitter, without notifying the board of directors. If he – together with friendly shareholders – acquires the majority of the shares, he has the power and can appoint a new Musk-minded board of directors and CEO and decide that the stock should be delisted. One such shareholder friend is Jack Dorsey. The former Twitter CEO tweeted that he supports the acquisition of Musk and that the current board of directors poses a problem for the company because it does not make clear choices.
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