Twitter reconsiders Musk’s offer after Tesla CEO secures funding: report

Initially hostile to the idea of ​​Tesla CEO Elon Musk taking over Twitter, the company reportedly warmed to the idea after the billionaire said last week he had secured the necessary $43 billion in funding.

Sources familiar with the matter told the Wall Street Journal that Twitter is reviewing the deal and may be closer to negotiating, given how quickly Musk was able to secure funding.

FILE: Tesla and SpaceX CEO Elon Musk arrives on the red carpet for the Axel Springer Media Prize in Berlin. (Hannibal Hanschke/Pool Photo via AP, File/AP Newsroom)

Yet any final agreement is far from conclusive. The two sides were to meet on Sunday to discuss the situation in more detail.

Musk last week announced an offer to buy the social media platform for $54.20 per share, but did not say how he would finance the acquisition.

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Musk said in documents filed with U.S. securities regulators on Thursday that the money would come from Morgan Stanley and other banks, some of which is secured by his huge stake in the electric car maker.

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Twitter has adopted an anti-takeover measure known as the poison pill that could make a takeover attempt prohibitively expensive.

The company said in a statement Thursday that it had received Musk’s updated proposal and “new information on potential funding” and said its board of directors was “committed to conducting a careful, comprehensive and deliberate”.

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FILE: The Twitter icon is seen on a mobile phone in Philadelphia April 26, 2017. (AP Photo/Matt Rourke, File/AP Newsroom)

Musk, who owns about 9% of Twitter shares, said he was exploring what’s called a takeover bid in which he would try to get other shareholders to pledge their shares to him at a certain amount. price on a certain date, bypassing the board. If enough shareholders agree, Musk could use that as leverage to get the board to drop its “poison pill” defense against its $54.20 per share offer.

But Musk has not yet decided to do so.

The poison pill could significantly increase the costs of a takeover. If someone acquires a 15% stake in the company, it would trigger a huge payout to shareholders that could bankrupt Twitter.

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Other banks involved in financing Musk include Barclays, Bank of America, Societe Generale, Mizuho Bank, BNP Paribas and MUFG. Morgan Stanley is one of Twitter’s largest shareholders, behind Vanguard Group and Musk.

Tesla Motors CEO Elon Musk speaks at the Tesla Giga Texas manufacturing

Tesla Motors CEO Elon Musk speaks during the Tesla Giga Texas “Cyber ​​Rodeo” grand opening party in Austin, Texas on April 7, 2022. (SUZANNE CORDEIRO/AFP via Getty Images/Getty Images)

Musk’s documents say $13 billion in funding came from Morgan Stanley and the other banks. Up to $12.5 billion is said to be in loans backed by Musk’s Tesla stock, and he’s also committed $21 billion in direct or indirect equity, though he didn’t disclose the source of those funds. The filing indicates that the equity commitment could be reduced by contributions from others or by additional debt incurred.

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FOX Business reached out to Twitter for comment, but did not hear back by press time.

The Associated Press contributed to this report.

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