“He’s making the offer and it’s not conditioned on financing or business due diligence,” a hedge fund manager reviewing the situation told The Post, adding that he was surprised at the speed Musk’s dealmaking team is moving.
According to Musk’s Securities and Exchange Commission filing, funding for his Twitter takeover bid consists of a $21 billion equity commitment from Musk as well as a variety of loans and financing commitments totaling $25.5 billion from several banks guaranteed by his financial advisor Morgan Stanley.
Morgan Stanley’s commitment includes $13 billion in loans against Twitter, and $12.5 billion in margin loans against as a portion of his Tesla shares, according to the filing. Musk is also in talks to take out a loan against his 9.2% stake in Twitter, currently valued at $3.4 billion, according to a source.
The Post first reported details of Musk’s plans to bring in partners on his bid for Twitter.
A lender following the situation said regulators may question how Morgan Stanley can guarantee this kind of high-leverage financing without doing extensive due diligence on Twitter.
“We are in receipt of the updated, non-binding proposal from Elon Musk, which provides additional information regarding the original proposal and new information on potential financing,” a Twitter spokesperson said in a statement.
“As previously announced and communicated to Mr. Musk directly, the Board is committed to conducting a careful, comprehensive and deliberate review to determine the course of action that it believes is in the best interest of the Company and all Twitter stockholders,” the spokesperson added.
Musk, who is racing to put a deal in place ahead of Twitter’s May 25 shareholder meeting, also disclosed that he has not received a response to the takeover proposal he submitted to Twitter’s board last week.
The board adopted a “poison pill” defense last week in an attempt to make it more difficult for Musk to grow his stake in the company. Musk has said he wants to make Twitter “the platform for free speech around the globe.”