Elon Musk Secures $46.5B in Funds for Twitter Takeover

Elon Musk with the help of Morgan Stanley has secured the funds needed for his proposed acquisition of Twitter, according to a new U.S. Securities and Exchange Commission (SEC) filing on Thursday. 

The initial proposal for the purchase of Twitter for $46.5 billion was made on April 14 through a separate SEC filing, in which Musk stated that in order to make Twitter the best possible version of itself, it would need to be transformed as a private company. 

Fast-forward a week and Musk has raised the funds in the form of two debt commitment letters from Morgan Stanley Senior Funding, in which the bank commits to offer loans worth $25.5 billion. The Tesla CEO will cover the remaining $21 billion through his personal funds without the help of equity partners. 

As it stands, the South African-born Musk owns 9% of Twitter, valued at roughly $2.9 billion. 

The filing also makes it clear that Twitter has not formally responded to Musk’s April 14 offer. “The Reporting Person is seeking to negotiate a definitive agreement for the acquisition of Twitter by the Reporting Person and is prepared to begin such negotiations immediately,” the filing read. 

Even with funding secured, the path to actually acquire Twitter remains daunting, especially after the Twitter Board of Directors adopted a limited Rights Plan or poison pill, reducing the chance of a hostile takeover. 

The Rights Plan gives certain shareholders the right to purchase more shares if an outsider attempts to gain control. The rights plan adopted on April 15, will expire April 14, 2023. 

“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” Musk said in his initial letter announcing his intention to buy the company. “Twitter has extraordinary potential. I will unlock it.”

Author: Tyler Irvin

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