Elon Musk claimed to have secured $7.14 billion to finance the takeover of Twitter, listing Oracle co-founder Larry Ellison and Saudi prince and businessman Al-Walid bin Talal among the investors.
In a document sent Wednesday to the American stock market policeman, the SEC, the boss of Tesla and SpaceX names a total of 19 investors who have agreed to contribute to the acquisition of the social network.
Multi-billionaire Larry Ellison, who co-founded computer giant Oracle and sits on Tesla’s board of directors, will bring in $1 billion.
The investment funds Sequoia Capital (800 million dollars) and Vy Capital (700 million) as well as the Binance cryptocurrency exchange platform (500 million) are also among the main contributors.
“New friend”
Prince ben Talal will for his part make available nearly 35 million of his Twitter shares once the takeover is finalized in order to retain a stake in the capital of the company that Mr. Musk wishes to withdraw from the New York Stock Exchange.
That’s about $1.9 billion at the Tesla boss’s proposed purchase price of $54.20 per share.
The Saudi investor initially deemed Mr Musk’s offer too low compared to the “intrinsic value of Twitter”.
“Great to get in touch with you, my ‘new’ friend @elonmusk,” Prince bin Talal tweeted on Thursday in response to a post from the Tesla boss in mid-April. “I think you will be a great leader for Twitter to propel and maximize its immense potential,” he added.
These financial contributions will allow the entrepreneur of South African origin and the richest man in the world to reduce the amount of his margin loan contracted with Morgan Stanley and other financial institutions, taking it from 12.5 billion to 6.25 billion.
A margin loan allows a borrower to increase their credit by pledging assets as collateral. In Mr. Musk’s case, it’s his Tesla shares.
At the same time, the share of the acquisition of Twitter financed in shares and in cash by Mr. Musk and the list of investors will rise to 27.25 billion dollars, against 21 billion previously.
Mr. Musk also told the SEC that he continued to seek other sources of funding from Twitter shareholders, including the platform’s founder and former boss Jack Dorsey.
On the right track
For Dan Ives and John Katsingris of Wedbush Securities, this new development is “a smart and strategic financial decision on the part of Mr. Musk which will be well received at all levels and which shows that the takeover of Twitter is on the right track to be acted by the end of the year”.
In addition, Elon Musk is expected to take on the role of interim CEO of Twitter for a few months once the acquisition is finalized, according to information from CNBC.
If this scenario takes place, he will replace Parag Agrawal, who has led the company since November and succeeded Jack Dorsey after the latter left.
Asked by AFP, Twitter refused to confirm this information. Tesla, for its part, did not respond to requests from AFP.
On Wall Street, Twitter shares rose 3.8% at the start of the session, to $50.91, but remained below the purchase price of $54.20 offered by Elon Musk.