Elon Musk says he has secured $46.5 billion to buy Twitter. The Tesla CEO is planning to take his bid directly to Twitter shareholders.
According to a filing with the Securities and Exchange Commission seen by Reuters, Musk has committed up to $33.5 billion of his own money, which will include $21 billion in equity and $12.5 billion in margin debt. Apart from this, Morgan Stanley has agreed to give $ 13 billion to Musk for this purpose. The amount is protected against Twitter itself, the filing showed.
Musk bought Twitter
To recall, Musk earlier this month offered to buy Twitter for $43 billion and take it private. He submitted his proposal to the board last month after acquiring a 9.2 percent stake in the company and declined a seat on the company’s board shortly after.
Following Musk’s offer, Twitter CEO Parag Agarwal held a Q&A session with employees, in which he said the board was not “held hostage” by news of Musk’s plans to buy the social media platform. He also said that Twitter’s board would take a decision in the best interest of the company.
Shortly after, reports suggested that Twitter’s board was not in favor of selling the company to the Boring Company’s founder. Musk, responding to a question on the board’s possible decision, said that “not putting this proposal up for shareholder vote would be completely unforgivable. They are the owners of the company, not the board of directors.”
Twitter’s board opts to avoid poison pill
Although Twitter’s board has yet to formally respond to Musk’s proposal, it has adopted a ‘poison bullet’ strategy to prevent a hostile takeover. The Board of Directors of the Company has adopted the “Shareholder Rights Scheme” or the ‘Rights Plan’ for a period of one year. The plan would empower some shareholders to buy more shares of the company if Musk is planning a hostile takeover.
Twitter’s board wrote in a release, “Under the Rights Plan, the rights will become exercisable if an entity, individual or group acquires beneficial ownership of 15% or more of Twitter’s outstanding common stock in a Board-approved transaction.” ”
The special rights scheme will end on April 14, 2023.
Elon Musk bagged $46.5 billion for Twitter buyout bid, this post first appeared on BGR India.