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BEIJING, April 21 (TMTPOST) — Tesla’s CEO Elon Musk has gained a US$46.5 billion financing promise to acquire Twitter, a file submitted by Twitter to the U.S. Securities and Exchange Commission shows.
Musk is reportedly considering a tender offer to acquire Twitter.
The document shows that Musk is promised to have financing of US$46.5 billion to acquire Twitter. Musk pledges to pour in US$33.5 billion himself for the acquisition deal, including US$21 billion worth of shares and US$12.5 billion of margin loan. In addition, several banks, including Morgan Stanley, have agreed to provide US$13 billion.
It was reported that Musk has been approaching potential financial partners at the Wall Street to raise fund for acquiring Twitter.
In corporate finance, a tender offer is a type of public takeover bid. The tender offer is a public, open offer or invitation (usually announced in a newspaper advertisement) by a prospective acquirer to all stockholders of a publicly traded corporation (the target corporation) to tender their stock for sale at a specified price during a specified time, subject to the tendering of a minimum and maximum number of shares. In a tender offer, the bidder contacts shareholders directly; the directors of the company may or may not have endorsed the tender offer proposal.
The document shows that Musk has not yet decided whether to send out the tender offer or opt for other options to pursue an acquisition. Musk said that he has not yet decided whether to provider his offering for Twitter’s shareholders. Musk plans to negotiate with Twitter and its board.
Musk owns around 9% of Twitter’s shares, which makes him the second largest shareholder of the company. He proposed to acquire Twitter at the price of US$54.2 per share last week. On Friday last week, Twitter adopted a limited duration shareholder rights plan, often called a “poison pill”, in response to the hostile takeover bid. The poison pill would dilute anyone amassing a stake in the company of more than 15% by selling more shares to other shareholders at a discount.