Twitter Responds As Elon Musk Secures $46.5 Billion Funding To Buy Company

Twitter has responded after billionaire businessman, Elon Musk, revealed that he has secured $46.5 billion in financing dedicated to his Twitter takeover bid.

The Tesla CEO revealed in a Securities and Exchange Commission (SEC) filing on Thursday that he had secured commitment letters to finance the deal, including debt commitment letters from Morgan Stanley as well as other unnamed financial institutions, and one equity letter from himself.

According to CNN, a spokesperson for Twitter, Brendan Lee, said the company had received the “updated, non-binding proposal” from Musk as well as the “new information on potential financing.”

“As previously announced and communicated to Mr. Musk directly, the Board is committed to conducting a careful, comprehensive, and deliberate review to determine the course of action that it believes is in the best interest of the Company and all Twitter stockholders,” Lee said.

Musk added in the SEC filing that he has yet to receive any formal response from Twitter’s board concerning his offer to acquire all of their shares at the price of $54.20.

He added that he is “seeking to negotiate” a definitive acquisition agreement and “is prepared to begin such negotiations immediately”.

In the filing, Musk also revealed that he is exploring whether to launch a tender offer, a method of buying Twitter stock in bulk directly from its shareholders, but “has not determined whether to do so at this time.”

Musk had previously alluded to the tender offer option in a few tweets which he put out. One of them was a poll where he expressed that the decision on whether or not to take the company private should be decided by its shareholders.

“Taking Twitter private at $54.20 should be up to shareholders, not the board,” he tweeted on Thursday last week.

Below the tweet, he put up the poll for his 82 million followers to vote on if they supported his opinion, to which 83% voted Yes.

Last week, while replying to a Twitter user who had posted an image showing how much stake in Twitter its board members have, Musk said the board members’ economic interests are not aligned with its shareholders because of how little their collective stake is.

“Wow, with Jack departing, the Twitter board collectively owns almost no shares! Objectively, their economic interests are simply not aligned with shareholders,” he tweeted.

Although Musk is currently the richest person in the world, majority of his wealth is tied up in Tesla stock, which raised questions as to whether he would even be able to acquire the company. Musk even confirmed the skepticism when he said in an interview that, “I’m not sure I’ll actually be able to acquire (Twitter).”

Although the company has yet to give Musk a formal response, THE WHISTLER reported that it implemented a “poison pill” which would prevent anyone from amassing more than a 15% stake in the company by allowing other shareholders to buy additional shares at a discounted price.

It was also revealed that a private equity firm had approached Twitter, saying that it was exploring the possibility of putting together a bid to counter the one Musk had presented.

Musk offered to buy Twitter entirely for $41 billion on Thursday, at a price of $54.20 per share.

“Since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.

“My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder,” Musk said in a letter to Twitter Chairman, Bret Taylor.

Musk became the largest shareholder in Twitter after acquiring a 9.2% stake in the company. Following that, Twitter CEO, Parag Agrawal, revealed that Musk would be joining the board of Twitter as a member, to which Musk replied that he was looking forward to it.

Musk, who is currently the richest person in the world, later made a U-Turn and rejected the offer to join the board. The move meant that he could buy as many shares in the company as he wanted because he would not be subject to an agreement that Twitter has with its board members that limits them to owning a maximum of 14.9% stake in the company.

Afterward, Musk was sued by former Twitter shareholders who claim that they missed out on the jump in the company’s stock price because he delayed in revealing that he had acquired a large stake in the microblogging platform.

The shareholders filed a proposed class action in Manhattan federal court, New York, where they said Musk made “materially false and misleading statements and omissions” by not revealing he had invested in Twitter by March 24 as federal law requires.

Following Musk’s disclosure of how much Twitter stake he purchased, its shares rose from $39.31 to $49.97 which investors saw as a vote of confidence from him.