Twitter Buyout in Doubt as Musk Financing Put on Hold

 

Elon Musk’s to-ing and fro-ing on whether to complete his Twitter buyout have cut off his efforts to arrange new financing that would limit his cash contribution to the deal.

The $44 billion Twitter buyout has been put on hold because of the uncertainty surrounding the deal, sources say.

Musk has been threatening to walk away from the deal unless the social media company provides him with data to back up its estimate that false or spam accounts comprise less than 5% of its user base.

This culminated in a letter from Musk’s lawyers to Twitter on Monday warning he may walk away unless more information is forthcoming.

Musk is on the hook to pay $33.5 billion in cash to fund the Twitter buyout after arranging debt financing to cover the rest.

His liquidity is limited given that his wealth, which is pegged by Forbes at $218 billion, is largely tied to the shares of Tesla, the electric car maker he leads.

Musk sold $8.5 billion worth of Tesla shares in April after he signed his Twitter buyout deal, and it is not clear how much cash he has available to meet his obligation.

He has said he raised $7.1 billion from a group of equity co-investors to reduce his contribution. Musk also sought to reduce this exposure further by arranging a risky $12.5 billion margin loan tied to the shares of Tesla, but then scrapped it last month.

Musk has been in discussions to arrange $2 billion to $3 billion in preferred equity financing from a group of private equity firms led by Apollo Global Management that would further reduce his cash contribution.

This is now on hold until there is clarity about the future of the acquisition, a source said.

 

• Reuters, with additional editing by George Russell

 

 

 

 

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