Elon Musk says that he has secured $46.5 billion for buying out Twitter. The Tesla CEO is planning to take his bid directly to Twitter’s shareholders.
According to a filing with the Securities and Exchange Commission as seen by Reuters, Musk has committed to out up to $33.5 billion of his own money, which will include $21 billion of equity and $12.5 billion of margin loans. In addition to this, Morgan Stanley has agreed to provide $13 billion to Musk for the purpose. This sum is secured against Twitter itself, the filing has revealed.
Musk moves to buy Twitter
To recall, Musk, earlier this month, offered to buy Twitter for $43 billion and take it private. He presented his offer to the board after acquiring a 9.2 percent stake in the company last month and rejecting a seat on the company’s board shortly after
After Musk’s offer, Twitter CEO Parag Agarwal held a Q&A session with the employees, wherein he said that the board was not ‘held hostage’ by the news of Musk’s plans to buy the social media platform. He also said that Twitter’s board would make a decision in the best interest of the company.
Shortly after, reports suggested that Twitter’s board was not in favour of selling the company to The Boring Company founder. Musk, responding to a question on the board’s possible decision, had said that “it would be utterly indefensible not to put this offer to a shareholder vote. They own the company, not the board of directors.”
Twitter’s board opts for poison pill defense
While Twitter’s board hasn’t formally responded to Musk’s offer yet, it has adopted the ‘poison pill’ strategy in a bid to prevent a hostile takeover. The company’s Board of Directors have adopted the “shareholder rights plan” or the ‘Rights Plan’ for a span of one year. This plan would empower some shareholders to buy more shares of the company if Musk plans a hostile takeover.
“Under the Rights Plan, the rights will become exercisable if an entity, person or group acquires beneficial ownership of 15% or more of Twitter’s outstanding common stock in a transaction not approved by the Board,” Twitter’s board wrote in a release.
The special Rights Plan will expire on April 14, 2023.
Elon Musk wants to buy out Twitter for $46.5 billion, but the board of directors is planning on resisting this offer by adopting the “poison pill” strategy and implementing a one-year shareholder rights plan with provisions for shareholders to buy more shares if Musk buys them for hostile takeover purposes.