The Tesla CEO wants to take over Twitter.
San Francisco In the takeover battle for the short message service Twitter, a formal offer from Tesla CEO Elon Musk is approaching all shareholders. That’s according to a memo Musk sent to the SEC on Thursday. The billionaire explains this by the lack of a response from the Group management to his takeover offer. But he had not yet made a decision.
In the same announcement, Musk also writes that he has secured a total of $ 46.5 billion in financing for the acquisition. 25.5 billion of these were loan commitments from a banking consortium led by Morgan Stanley. The remaining $ 21 billion will be contributed by the Tesla CEO through his own shares.
Elon Musk is the richest man in the world. His fortune is currently estimated at about 282 billion dollars. A large part of the values result from his shareholdings in the company. According to calculations by Bloomberg, Musk currently has about three billion dollars in cash or other liquid assets, having spent $ 2.6 billion on about 9.2 percent of Twitter’s shares in recent months.
Even after the announcement of the financing commitments, investors still doubt that Musk will reach his goal: Twitter’s share price in early US trading was up by 0.7 percent at just around $ 47. Musk had offered $54.20 per share in his non-binding offer.
Competition for Twitter would also be possible
Twitter said in a statement: “The Board of Directors is committed to conducting a careful, comprehensive and considered audit to determine the course of action that it believes is in the best interests of the Company and all Twitter shareholders.“
The billionaire, who already owns about nine percent of the shares in the social network, recently announced that he would take over the entire company for about $ 43 billion. He wants to take Twitter off the stock market after that. Analyst Ali Mogharabi of Morningstar said: “If Musk’s offer is rejected, he could still try to raise the capital to create a similar social media platform to compete with Twitter.“
The Supervisory Board of the US group has launched a so-called “poison pill” to defend itself against the hostile takeover. The poison pill takes effect when an individual or group acquires at least 15 percent of Twitter’s outstanding common shares without the Board’s approval.
Then the other shareholders have the opportunity to purchase additional shares at a discount. That would make a takeover more difficult. The rule is to apply for one year.