Elon Musk has learned his lesson, and he isn’t wasting time — the Tesla and SpaceX founder says he’s put together $46.5 billion in funds to buy Twitter, and is considering a tender offer to shareholders if the board rejects his offer.
Details were disclosed in a Thursday filing with the SEC. The $46.5 billion – backed by debt commitment letters from Morgan Stanley and other financial firms – is $3.5 billion more than the $43 billion of his publicized offer, though it was not immediately clear whether that represented a higher price-point offer or just buys Musk additional negotiating wiggle-room.
This comes as the Tesla CEO this month mounted a hostile takeover of the company after buying up a 9.2% stake in it and became its largest individual shareholder. Last week, Musk began his takeover but did not previously explain how he would fund it in his proposal.
Given that the Twitter board has not responded to his offer, Musk said he has lined up $46.5 billion for his offer of $54.20 per share in acquiring the company. Morgan Stanley, Bank of America, Barclays and several banks have committed to lending Musk an aggregate of $25.5 billion, according to the filing.
Musk, the world’s richest person whose wealth comes mostly from existing shares in his two companies, will cover the rest of the $21 billion via equity financing.
“Twitter has not responded to the Proposal. Given the lack of response by Twitter, the Reporting Person is exploring whether to commence a tender offer to acquire all of the outstanding shares of Common Stock (together with the associated rights issued pursuant to the Rights Agreement (the “Rights” and, together with the Common Stock, the “Shares”)) that are issued and outstanding (and not held by the Reporting Person) at a price of $54.20 per share, net to the seller in cash, without interest and less any required withholding taxes, subject to certain conditions (the “Potential Offer”), but has not determined whether to do so at this time,” the filing said.
Twitter’s board last Friday approved plans to employ a poison pill defense to fight Musk’s takeover of the company.
Any shareholder could choose to take the offer; if a majority (plus Musk’s outstanding shares, just over 9%) were to agree, he could take control — though Twitter’s recently enacted “poison pill” conditions could upend that process.
The filing is notable in that it prevents Musk from making the same mistake a second time: The Tesla CEO got in hot water with the SEC for tweeting in 2018 that he was “considering taking Tesla private at $420. Funding secured.” But funding was not, in fact, secured at the time; the SEC charged Musk with fraud, and he agreed to a settlement deal that required lawyers to review any posts “material” to shareholders.
Pamela Chelin contributed to this report.