Elon Musk is evidently looking to proceed to some degree with his proposed purchase of Twitter (NYSE: TWTR). Within a filing made this morning, it was revealed that Musk is looking to negotiate a definitive agreement for the acquisition of the social media platform.
Notably, Musk has previously stated that he is not looking to negotiate on his offer to acquire the platform. In a letter to Chairman Bret Taylor he is quoted as stated, “My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder.” It appears that a poison pill plan adopted by Twitter over the holiday weekend has as a result had some impact on Musk’s plan of attack.
With no response from Twitter’s board, Musk is now considering a tender offer to acquire shares in the company, despite the poison pill in place. The tender offer, which is currently being “explored,” would be at the previously offered figure of $54.20 per share, payable to the seller in cash.
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To proceed with the proposal, if he elects to do so, Elon has also reportedly entered into several sources of funding, providing up to $46.5 billion in commitments for the proposed transaction, including:
- A $13 billion debt commitment letter from Morgan Stanley Senior Funding, which would provide a senior secured term loan of $6.5 billion, a revolving facility of $500 million, a senior secured bridge loan of $3.0 billion, and a senior unsecured bridge loan of $3.0-billion
- A $12.5 billion debt commitment letter from Morgan Stanley Senior Funding for a margin loan, which would see a 20% loan to value ratio applied to Musk’s Tesla shares
- An equity commitment letter from Musk himself which would provide the remaining funding required for the transaction to occur, with this commitment letter estimated to be valued at $21.0 billion
Musk now is left with the decision of whether to proceed with the hostile takeover attempt.
Twitter last traded at $46.91 on the NYSE.
Information for this briefing was found via Edgar, Twitter and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
