Elon Musk races to secure financing for Twitter bid: sources

ELON Musk is racing to secure funding for his US$43 billion bid to buy Twitter.

Morgan Stanley, the investment bank working with Musk on the potential deal, has been calling banks and other potential investors to shore up financing for the offer, 4 people with knowledge of the situation said. Musk is first focused on raising debt and has not yet begun to seek equity financing for his bid, 1 of the people said.

Musk, 50, is evaluating various packages of debt, including more senior debt known as preferred debt and a loan against his shares of Tesla, the electric carmaker that he runs, 2 of the people said. Apollo Global Management, a private equity firm, is among the parties considering offering debt financing in a bid for Twitter.

Musk is aiming to pull together a fully funded offer as soon as this week, 1 of the people said, although that timeline is far from certain. The people with knowledge of the discussions were not authorised to speak publicly because the details are confidential and in flux.

Last week, Musk, the world’s wealthiest man, made an unsolicited offer for the social media company, saying that he wanted to take it private and that he wanted people to be able to speak more freely on the service. But his offer was regarded skeptically by Wall Street because he did not include details about how he would come up with the money for the deal.

While Twitter’s board has not rejected Musk’s offer, it responded days later with a “poison pill”, a defensive tactic that would effectively prevent Musk from owning more than 15 per cent of Twitter’s shares. Musk owns more than 9 per cent of Twitter, making him its single-biggest individual shareholder.

Twitter is expected to provide an update on its deal-making prospects when it reports quarterly earnings Apr 28.

Musk’s offer for Twitter stands at US$54.20 a share. Several analysts have said the company’s board is likely to accept only an offer of US$60 a share or more. Twitter’s stock rose above US$70 a share last year when the company announced goals to double its revenue, although its stock has since fallen to around US$45 as investors have questioned its ability to meet those targets. NYTIMES