Marathon endeavors initiated by the American billionaire to provide the necessary funding to acquire Twitter .. Will he be able to achieve his dream?
An informed source said that American billionaire Elon Musk has started contacts with potential partners of American financial institutions to provide the necessary funding for his offer to acquire the social networking site Twitter for $43 billion.
And the Bloomberg news agency quoted the source as saying that Musk, the owner and president of the American electric car maker Tesla, had held talks with his advisers regarding an agreement with potential partners to finance the deal.
Bloomberg indicated that while Musk is the richest person in the world with a fortune estimated at $261 billion, most of his wealth is shares in Tesla, and therefore he may not have enough cash to acquire Twitter.
The American newspaper, “The Wall Street Journal”, had quoted informed sources as saying that the financial investment company “Apollo Global Management” is considering participating in Elon Musk’s bid to acquire Twitter.
Tesla shares
Two sources revealed that Musk is evaluating various debt packages, including more large debt known as “preferred debt”, as well as a loan once morest his Tesla shares.
Musk aims to collect a fully funded bid as soon as this week, although that timeline is uncertain.
Musk aims to collect a fully funded bid as soon as this week, although that timeline is uncertain.
This comes as Morgan Stanley, which Musk has chosen to manage his side of the potential deal, is inviting banks and other potential investors to support financing the offer, according to the New York Times, citing four sources.
One of the sources said that Musk is focusing primarily on raising debt financing and has not yet begun seeking equity financing for his existing offering.
Last week, Musk, the world’s richest man, made an offer to take over the social media company, saying he wanted to turn it into a private company, with the aim of people being able to speak more freely on the platform, but Wall Street traders questioned his offer because he did not It includes details of how he got the money needed for the deal.
And if the Twitter deal is executed, as a traditional debt-financed purchase, it is likely to be the largest deal of its kind in the past two decades at least, and it will be difficult to finance it for any buyer, because Twitter does not have the financial profile that is typical for operations Debt-fueled buyouts.
“poison pill”
On the other hand, Twitter’s board of directors last week approved a plan called a “poison pill” to prevent Elon Musk’s acquisition of the company and cancel the registration of its shares in the stock exchange.
Twitter’s board said it had adopted a shareholder equity plan known as a “poison pill”, which would make it difficult for Musk (or any other potential buyer) to take over the company without board approval.
The “poison pill” plan came a day following Musk made an offer to acquire all of the shares he did not own on the site for $54.20 per share, valuing the company at regarding $41 billion, a 38% premium to Twitter’s closing price the day before. To reveal a large mask share.
The US Securities and Exchange Commission confirmed Twitter’s plan to address the takeover attempt, which includes the issuance of Twitter a new amount of shares that all its shareholders except for Musk can buy at a discount.
The plan also includes “imposing a significant penalty” on any person or entity that acquires more than 15% of Twitter’s shares without obtaining the approval of the board of directors. Musk currently owns more than 9% of Twitter’s shares.
The “poison pill” plan will remain in place for regarding a year and will be activated if Musk increases his stake in the company to 15%, he currently owns regarding 9% of the stock.
Twitter said in a statement, “The board of directors adopted the shareholders’ rights plan following the receipt of a non-binding offer to acquire Twitter, and the rights plan expires on April 14, 2023.
The rights plan reduces the possibility of any entity, person, or group acquiring a controlling share of Twitter shares through the cumulative purchase of its shares on the open market, without paying a price higher than the market price of the share to all shareholders, or without giving the board of directors sufficient time to reach a sound decision and take The necessary steps to achieve the interests of shareholders.
escalation
In a less friendly move, Musk might sue Twitter’s board of directors over a “poison pill”, accusing it of not acting in the best interests of shareholders, even though that will likely become a drawn-out battle.
And Elon Musk might try to keep pressure on the board from the outside to accept his deal, which he did repeatedly over the weekend.
