Elon Musk has reportedly sourced a $46.5 billion financing commitment to buy Twitter and he is considering to launch a tender offer.
Musk had put up an offer to buy the social media giant for $54.20 per share, which would total around $43 billion. At the time, he didn’t present the different ways in which he would acquire the funds.
His offer to take over Twitter and convert it into a free speech platform was skeptical to some as they were pretty unsure about how Elon Musk would source the funds.
The sources also claimed that Musk had tapped Morgan Stanely to raise $10 billion in funds in a leveraged payout and sought out his Tesla and SpaceX investors.
Elon Musk to present a tender offer
Musk announced on Thursday that he was exploring ways to extend a tender offer to buy all of Twitter’s common stock for $54.2 per share in cash. Under the filed documents with US securities, Musk, who owns 9% of Twitter, would bypass the board to offer his price to other shareholders.
There hasn’t been any confirmation from Musk as to whether he would approach it in that way. Twitter had adopted a ‘poison pill’ defense that would make Elon’s attempt to take over Twitter quite expensive.
Entities related to (Musk) have received commitment letters committing to provide an aggregate of approximately $46.5 billion
Sources cite
Sources cite that Elon Musk has secured $46.5 billion in funding to take over Twitter. The alleged funds are claimed to come from Morgan Stanley and other financial institutions, including Bank of America, Barclays, Societie Generale, Mizuho Bank, BNP Paribas, and MUFG.
Twitter shares are currently $46.57 at the time of writing. Elon’s offer is $7.6 more than the current share price.
The documents also state that Musk is looking to negotiate a definitive agreement for the acquisition of Twitter and is prepared to begin such negotiations immediately.
The tender offer would assist Elon in acquiring the Twitter stocks from the shareholders. Musk was constantly hinting at the word “tender” in his tweets this week. The tender offer would also help Elon to dodge the poison pill.