Musk says he’s secured funding commitments and is exploring Twitter tender offer


Funding secured?

Elon Musk confirmed in a Thursday filing that he was “exploring whether to commence a tender offer” for Twitter Inc. TWTR, +0.86% and said that he has received funding commitments to help him do so.

The Tesla Inc. TSLA, +5.79% chief has been teasing the possibility that he would launch a tender offer for Twitter in some recent lyrical and literary tweets, amid a bitter battle with the company’s management team over ownership of the social-media platform. Thursday’s filing formally confirmed that interest, and offered new details about funding commitments from Morgan Stanley that Musk said he had lined up.

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Musk first disclosed earlier this month that he had amassed a roughly 9% stake in Twitter, and originally the company planned to put him on the board of directors with the caveat that he couldn’t amass a Twitter stake of more than 14.9% while in the role. That board plan quickly fell through, and Musk announced last week that he was seeking to acquire the company outright for $54.20 a share, or roughly $43 billion.

Twitter adopted a “poison pill” strategy following Musk’s unsolicited bid, seeking to block the takeover.

“Given the lack of response by Twitter,” Musk said in his filing, that he was exploring a tender offer, though he has “has not determined whether to do so at this time.”

Also read: Elon Musk says there’s a ‘Plan B’ to acquire Twitter if his current bid fails — but he doesn’t say what it is.

Musk, who drew the ire of regulators for a 2018 tweet claiming he had “funding secured” to take Tesla private at $420 a share, suggested he was better armed with funding for this Twitter bid.

He submitted a pair of debt-commitment letters from Morgan Stanley Senior Funding Inc. and other financial institutions indicating that the bank partners are willing to provide $25.5 billion of funding in aggregate related to the bid. Additionally, he provided his own equity-commitment letter, which he said indicated that he was prepared to pay the remaining amounts related to the merger offer, amounting to about $21 billion.

Twitter’s stock rose 1.0% in morning trading, implying a market capitalization of $37.71 billion. It has gained 2.9% since Musk disclosed his buyout bid.

Over the past 12 months, Twitter’s stock has tumbled 29.9%, while the S&P 500 index SPX, -0.52% has gained 7.8%.

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