May 28, 2023

Dubai Week

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Musk is looking to finance the acquisition of Twitter

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Informed sources say that Elon Musk is in talks with large investment firms and high-ranking wealthy people to raise more funds to acquire his Twitter account for $ 44 billion and to link less than his wealth to the deal.

Musk is the richest man in the world, with Forbes estimating his net worth at $ 245 billion. But much of his wealth is tied up in the shares of Tesla, the electric car maker he leads.

Last week, Musk announced that he had sold $ 8.5 billion worth of shares in Tesla following a deal to buy Twitter.

Sources said the new fund, which could come in the form of a preferred or common stock, could reduce the $ 21 billion cash contribution pledged in the Musk deal, as well as a small loan he received against Tesla shares.

Musk also promised to issue some Tesla shares to banks to arrange a $ 12.5 billion margin loan to finance the deal. One source said that based on the new investor’s interest in financing the deal, he may seek to reduce the size of the margin debt.

Sources said that key investors such as private sector companies, hedge funds and net worth individuals are in talks with Musk to provide a preferred equity fund for acquisitions.

Apollo Global Management and Aris Management Corporation are among the private sector companies involved in the funding negotiations.

They said Musk had not yet decided which partners would provide him with the funds needed to finalize the deal. Musk is not currently seeking to use more credit tools for the Twitter deal.

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And if Musk withdraws from the Twitter acquisition deal, he will have to pay a $ 1 billion fine to the company that owns the popular social networking site, and the company has the right to sue him for failing to finalize the deal.