Elon Musk has put to bed any idea that he wouldn’t be able to pull together the funding to buy Twitter, saying in a new filing with the Securities and Exchange Commission that he has secured $46.5 billion to buy Twitter.
Musk, the world’s richest man, has been trying to execute a hostile takeover of Twitter for the last few weeks. First, he became the company’s largest shareholder. Then, after rejecting a board seat that would have limited his ability to buy the company, he made a bid to purchase the company outright and take it private.
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One of the big questions after Musk made his original announcement was whether or not he would be able to pull together the money to buy the company on his own. Though Musk is worth upwards of $250 billion, much of that is tied up in SpaceX and Tesla stock. Now, he has the money, and he is “seeking to negotiate a definitive agreement for the acquisition of Twitter” and “prepared to begin such negotiations immediately,” according to the filing.
The filing says that Musk has received “commitment letters committing to provide an aggregate of approximately $46.5 billion” from Morgan Stanley and other unnamed financial institutions in the form of loans and equity financing. Musk submitted three commitment letters alongside the filing.
This doesn’t necessarily mean that Musk’s takeover is inevitable; Twitter recently adopted a “poison pill,” or shareholder rights plan, a move first developed in the 1980s to combat a wave of aggressive takeover attempts.
The plan makes new, cheaper shares available for sale to existing shareholders if a person or entity (in this case, Musk) tries to buy huge amounts of Twitter’s outstanding stock.
What happens next is still up in the air, but the move suggests Musk is serious about buying the company, or at least serious about making it look like he’s serious about buying it (it can be hard to tell with him).
For more about how this could play out, read our interview with an old-school corporate raider about the potential deal.
