Tesla CEO Elon Musk revealed that he has secured commitment letters for $46.5 billion in financing to acquire Twitter and is searching for a solution because the board of Twitter has been unresponsive to the billionaire.
In a securities filing, Musk said he’s considering making a tender offer “to buy shares of Twitter directly from investors,” according to The Wall Street Journal.
With a group of financial institutions that are led by Morgan Stanley providing $25.5 billion in financing for Twitter, Regan laid out the funds: “$12.5 billion in margin loan against his Tesla shares,” as well as the “remaining money ($21 B) to come out of his own pocket.”
“This man is SERIOUS,” Regan concluded.
The board of directors at Twitter this week voted to adopt a “poison pill” to prevent Elon Musk’s takeover attempt.
The board approved a “limited duration shareholder rights plan,” which allows current shareholders, excluding Musk, to purchase additional shares at a discount, according to Ax
The aim is to reduce Musk’s stake in the firm and make a takeover more expensive or even impossible.
Musk gave the world a clue into his intentions to make a tender offer earlier this week when he tweeted, “Love me Tender.”
A tender offer is a proposal from an investor to stockholders of a public corporation, according to the Corporate Finance Institute.“The offer is for investors’ shares to be sold at a certain price at a certain time,” CFI explained. “In some instances, several people may make the tender offer, such as a group of investors or another company. Tender offers are often used to merge one firm with another.”
Elon Musk has criticized the board of Twitter since first proposing to buy the firm and take it private.
“For example, Musk blasted Twitter’s board for “neutrally” failing to represent the company’s investors’ “economic interests” in a statement this week.”
“Elon Musk is in for a hard time,” Chris Bakke, the creator of Laskie, tweeted. “I’m not sure he’s ready to face a few PhDs and MBAs with several Baronesses who use Twitter once a year (to reset their passwords) and control roughly 77 shares of the company.”
“Wow, the Twitter board collectively owns almost no shares now that Jack has departed!” Musk exclaimed. “Shareholders objectively do not have similar economic interests to those of the members of the board.”
On the same day, Musk appeared to agree with entrepreneur David Sacks’ tweet that a refusal of his offer to fully purchase Twitter would imply “corruption.”
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