Elon Musk Raises His Contribution To Twitter Acquisition
But one of Elon Musk’s biggest backers on the Twitter board has tendered his resignation after Twitter shareholders voted to boot him
Elon Musk’s lengthy and controversial attempt to acquire Twitter has taken a couple more twists this week.
In April Musk confirmed his intention to purchase Twitter for $44bn in cash. He revealed at the time that he had secured funding of $46.5 billion for his bid.
This was made up of $33.5 billion of his own money, $21 billion from Musk, plus a further $12.5bn via a loan secured against his shares in Tesla. Banks, including Morgan Stanley, agreed to provide another $13 billion in debt secured against Twitter itself.
Increased contribution
But earlier this month Musk put his Twitter takeover on hold over his demand for clarification on the number of spam or fake accounts on the service.
Twitter had estimated in a filing that fewer than 5 percent of its monetisable daily active users during the first quarter were fake or spam accounts.
Musk believes that figure is as high as 20 percent.
Despite Musk saying the deal was on hold, Twitter’s board of directors warned that it will ‘enforce’ Musk’s takeover offer.
Musk’s breakup fee, if he pulls out, is reported to be as high as $1 billion.
Musk again criticised Twitter this week when it was fined $150m by the FTC “for deceptively using account security data for targeted advertising.”
Musk said the fine was concerning news, and if Twitter was not truthful here, what else was not true (i.e. number of bots, fake accounts etc).
Now on Thursday in an SEC filing, Musk revealed that his personal financial commitment to the Twitter deal is now $33.5 billion, up from $27.3bn.
The filing also revealed he has raised an additional $6.25bn in equity financing, reducing the amount of debt he would take on for the $44bn purchase.
The filing also revealed Musk is in talks with Twitter founder and former CEO Jack Dorsey (a supporter of Musk’s takeover) and others to additional financing commitments in order to complete the deal.
Meanwhile in a letter to investors who are backing the holding company that Musk is forming to take Twitter private, the Tesla and SpaceX CEO expressed his commitment to completing the deal.
Shares of Twitter rose more than 5 percent after hours on the news, while Tesla shares dipped about 1 percent.
Prior to that Tesla shares have plummeted since Musk’s bid for Twitter first became public knowledge, over concern the Tesla and SpaceX CEO, will be even more distracted as owner of the social media company.
Musk has also pledged to restore the Twitter account of former US President Donald Trump.
Shareholder vote
And Musk continues to face problems with his decision to acquire Twitter, after shareholders earlier on Wednesday voted not to re-elect Silver Lake co-CEO Egon Durban to the company’s board, CNBC reported.
Durban is a long-time business associate and backer of Elon Musk’s companies and past business deals.
A Twitter spokesperson told CNBC that Egon Durban “has tendered his resignation” from the board, which hasn’t decided whether to accept it.
“In accordance with the Company’s Corporate Governance Guidelines, Egon Durban has tendered his resignation to the Board, with the effectiveness of such resignation conditioned upon the Board’s acceptance of such resignation,” the spokesperson told CNBC via email.
“The Nominating and Corporate Governance Committee of the Board will promptly consider whether to recommend that the Board accept Mr. Durban’s resignation and provide an update in due course,” wrote the spokesperson.
