This spring’s soap opera reveals a new episode. After buying 9.2% of Twitter and declining a place on the board of directors, Elon Musk finally proposed an outright takeover of the social network.
Faced with this takeover, Twitter immediately took action by activating a “poison pill” to avoid a forced takeover by the billionaire. Elon Musk, for his part, is gradually advancing in his approach as evidenced by the documents filed on Thursday.
The financing plan is ready
Elon Musk has therefore transmitted the details of his $ 46.5 billion financing plan which would allow him to buy Twitter. 25.5 billion would come from borrowings from the bank Morgan Stanley Senior Funding which provided two letters of commitment, the remaining 21 billion will be covered by Elon Musk in person.
Although Tesla’s CEO is virtually the richest person on the planet with an estimated fortune of $249 billion, most of his “value” is tied up in Tesla shares whose fluctuations can make banks wary.
Alone to invest
To buy the company, Elon Musk therefore relies on his own funds and on a loan. An alternative solution would have been to appeal to other investors in order to divide the cost of the acquisition.
However, the billionaire’s unpredictability and Twitter’s erratic financial performance do not make the company an ideal takeover candidate. Combined with Elon Musk’s statement that his investment “is not a way to make money,” that seems enough to put off potential partners (although with Elon Musk, he doesn’t). is not necessarily wise to take such statements at face value).
The ball is in Twitter’s court
The filing of the application with the U.S. authorities states that “the registrant seeks to negotiate a definitive agreement for the acquisition of Twitter by the registrant […] and is ready to begin these negotiations immediately”.
The ball is therefore in the court of Twitter, which claims through a spokesperson to have received the updated proposal, which also stated that “the Board of Directors is committed to conducting a careful, complete and deliberate review to determine the course of action that it believes is in the best interests of the company and all Twitter shareholders.
To be continued in the next episode.