Tesla and SpaceX CEO Elon Musk is looking to partner with co-investors in his $43 billion USD bid to buy social media platform Twitter — reports The New York Post.
Earlier this month, Musk revealed he had bought a 9.2% stake in Twitter for $3.4 billion, becoming the company’s largest shareholder. Musk was originally going to join Twitter’s board of directors, but he has instead set his sights on acquiring the company outright.
Musk may be the richest person in the world, but the bulk of his net worth is tied up in shares of his electric vehicle (EV) company. The celebrity billionaire has therefore reportedly resorted to raising debt against Twitter (and possibly his own stock of the company) like a traditional leveraged buyout, along with a sizeable cash infusion from co-investors to finance the deal.
According to sources with knowledge of the matter, the Post reports Musk is willing to put up $10-15 billion of his own cash to take Twitter private, on top of his existing 9.2% ownership of the company.
The Tesla CEO has said to have requisitioned Morgan Stanley to raise another $10 billion in debt against Twitter. Musk is hoping for the remainder of his $43 billion offer for the social media platform to come from co-investors, who will issue a hostile tender offer directly to Twitter shareholders, said the sources.
The New York Post previously reported that one likely possibility is for Musk to team up with private-equity firm Silver Lake Partners. Musk and Silver Lake go way back — the equity firm was planning to co-invest in Tesla to take the electric vehicle (EV) maker private in 2018, and co-CEO Egon Durban is a member of o Twitter’s board of directors.
“The co-investors will combined have more equity than Musk but he will be the biggest single holder,” said one of the sources.
Musk is expected to launch the tender offer in around 10 days, according to the sources. The EV pioneer hinted at the hostile approach in a cryptic tweet over the weekend that referenced Elvis Presley’s 1956 hit Love Me Tender.
🎶 Love Me Tender 🎶
— Elon Musk (@elonmusk) April 16, 2022
The sources also said that Musk isn’t having the easiest time finding co-investors to go in on the Twitter bid with him, and Morgan Stanley is struggling to attract other banks to participate in the cash raise. Potential financiers seem apprehensive over Musk’s penchant for controversy, and many doubt if Twitter is even worth the $54.20 a share the Tesla CEO has offered to buy it for.
“A lot of private equity firms are doing the work and struggling on the valuation,” a source said. “This is not growing like Instagram or TikTok.”
Musk has told Twitter’s board that the social network “has potential to be the platform for free speech around the globe.” He has also criticized the company’s board time and again, and last week pointed out that its members own “almost no shares” of Twitter, and so might not share the economic interests of investors.
Twitter’s board of directors on Friday announced the unanimous adoption of a limited duration shareholder rights plan — commonly referred to as a “poison pill” — just one day after Musk tendered his offer to buy the company. The so-called poison pill prevents Musk from buying more than 15% of Twitter.
