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Elon Musk has reportedly raised $46.5 billion in financing - $21 billion of the total is contributed by Musk himself - to back a possible hostile bid for Twitter.
Beyond the equity, Musk is also infusing into the offer an additional $12.5 billion with a margin loan secured on the basis of his shares in Tesla – the electric automaker run by Musk as the CEO of the company.
The remaining $13 billion of the package is being contributed by American investment bank Morgan Stanley, which ranks among the top financial institution.
As per the document, Musk – the richest man in the world – is now eyeing the potential opportunity, assessing whether to draft a tender for the Twitter shares that are currently not owned by the Tesla CEO, excluding the 9.2% of the social media platform that he already owns.
Last week, Elon Musk announced a bid for $54.20 for each share of Twitter.
Typically, a tender offer is recognized as a hostile bid that steers clear of the company’s board and in a conventional takeover scenario would make propositions to stakeholders. However, in this case, Twitter’s board seems to have blocked Musk from expanding his shares without approval.
Imperative to note that, after Musk presented his bid, Twitter deployed a “poison pill defense” to restrict the maximum stake of Musk on the social media platform to go beyond 15%.
While unfortunate for the tech enthusiast, the tactic is allowing Twitter’s existing investors to purchase shares at massive, discounted prices, preventing unwanted attempts towards increasing the stake above 15% without the company board’s approval.
Despite the company board’s aim to dilute the shareholding of uninvited bidders like Musk, several shareholders in support of Musk’s approach allow for the chances that the board may succumb to pressures and drop the poison pill gambit.
Source Credit: https://www.theguardian.com/technology/2022/apr/21/elon-musk-twitter-secures-fund-possible-hostile-bid-tesla
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