Science

Sources say Musk is looking for investors to fund Twitter takeover

(Reuters) – Elon Musk is in talks with investment funds and billionaires who could get a bigger stake in a $44 billion takeover of Twitter and cut his personal funding stake, sources told Reuters.

The Tesla founder received $13 billion in secured Twitter loans from banks, but the banks were reluctant to go any further given the company’s low cash position in San Francisco, Reuters reported last month.

Elon Musk pledged to provide $21 billion in cash himself and pledged some of his Tesla shares to banks to secure a $12.5 billion margin loan to complete the financing.

The participation of investment funds in the round could allow Elon Musk to reduce his share or the amount of the margin loan, sources said on condition of anonymity.

Talks have begun with private equity funds, hedge funds and billionaires who could provide financing in exchange for priority securities, the sources said. These securities would make it possible to receive regular dividends from Twitter, similar to the coupon paid periodically on a bond. However, their amount may increase depending on the evolution of the value of the company.

Funds raised include Apollo Global Management and Ares Management Corp.

Sources said that Elon Musk has yet to decide what place he can take among these investors, but he is not going to take on additional debt to finance the takeover of the company.

The billionaire also invited some of Twitter’s large individual shareholders to stay with the company, one of the sources said. We are talking about the former general manager and current member of the board of directors of the social network, Jack Dorsey, who has not yet made a decision on this matter, she said.

Neither Elon Musk, nor Jack Dorsey, nor the Apollo and Ares funds responded immediately to Reuters inquiries.

(Report by Chibuike Oguh in Los Angeles and Krystal Hu in New York, French version of Tangi Salaün, edited by Jean-Michel Belo)

Back to top button