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.
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.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.