Elon Musk has informed the United States Securities Market Commission (SEC) that he has guarantees worth $46.5 billion to finance the launch of a possible takeover bid (OPA) on Twitter or to negotiate a transaction with the company in the terms set forth in the non-binding proposal presented last week and regarding which no response has yet been received.
The versatile businessman owner of Tesla has acknowledged before the US market regulator that, “given the lack of response from Twitter, he is studying whether to launch a takeover bid to acquire all the ordinary shares in circulation at a price of $54.20 per share “, although he has stressed that for the moment he has not determined whether to do so.
In this way, to finance the proposed transaction to the address of Twitter or a potential OPA, Musk has presented to the SEC a series of commitments with entities to finance the $46.5 billion of the potential transaction.
Specifically, the participating entities have committed to provide $12.5 billion through margin loans available to Musk.
They will also provide an additional $13 billion through a $6.5 billion term senior secured line of credit, a $500 million revolving senior secured line of credit, a senior secured bridge line of credit for an aggregate amount of up to $3 billion, and a senior unsecured bridge loan of another $3 billion.
On his side, Elon Musk himself has filed a letter with the SEC in which he agrees to contribute approximately $21 billion to cover all amounts payable in connection with the transaction plus related fees and expenses.
Elon Musk has offered $54.20 for each share of Twitter, which is a 54% premium over January 28, when Musk started buying Twitter stock, as well as a 38% premium over April 1, when revealed his position in the company.
By taking over all the shares in this operation, Twitter would be excluded from the stock market in the event that the board of directors approves the offer and the shareholders accept it.
“I invested in Twitter because I believe in the potential to be the platform for freedom of expression around the world and I believe that freedom of expression is a social imperative for a functioning democracy. However, since making my investment I have realized that the company will not prosper or serve this social imperative in its current form.
Musk currently owns 73.1 million shares of Twitter, equivalent to 9.1% of the company’s share capital. If the transaction succeeds, the businessman, the richest person in the world according to the Forbes list, will have to pay $39,431 million for the 90.9% that he still does not control.