Media report suggests Elon Musk is in talks with private equity group Thoma Bravo about partnering up for possible Twitter takeover
The world’s richest man Elon Musk is reportedly in talks with private-equity firm Thoma Bravo, which is also considering its own bid for social networking giant Twitter.
The New York Post, citing two sources close to the situation, reported that Musk and Thoma Bravo are talking about partnering on a possible takeover bid for Twitter.
In an SEC filing, Musk revealed he has committed to stump up $33.5 billion – made up $21 billion of his own money, plus a further $12.5bn via a loan secured against his shares in Tesla.
Banks, including Morgan Stanley, have agreed to provide another $13 billion in debt secured against Twitter itself, the filing states.
Musk has been hinting he had a plan B in store for over a week now, if Twitter’s board rejected his “best and final” takeover offer.
That plan B will likely see Musk approach Twitter shareholders directly, bypassing the board.
And going to Twitter shareholders has been confirmed in the latest SEC filing.
Musk’s offer however is being opposed by at least one noted Twitter shareholder, namely Saudi Arabia’s Prince Alwaleed bin Talal.
The prince has a long term stake in Twitter via his investment firm Kingdom Holding Company, which holds 5.2 percent of Twitter.
On Good Friday, as Twitter’s board of directors considered Musk’s hostile takeover bid, the social networking firm implemented a limited-duration ‘shareholder rights plan’ (a so called poison pill) that could stall or prevent Musk’s takeover attempt.
But with the expertise of Chicago-based buyout firm Thoma Bravo onboard, it could provide the key to Musk moving forward with a binding offer for Twitter, the Post reported.
This is because Musk doesn’t want to lumbered with the entire acquisition cost of Twitter.
“What it would take Musk to raise the equity – like selling his Tesla shares – is something he probably doesn’t want to do,” one source briefed on the situation told The New York Post.
For similar reasons, Thoma Bravo – a major name in private equity whose past investments have include software security giant McAfee – would likely move forward on a Twitter buyout with Musk or not at all, the sources said.
Thoma Bravo is not the only party interested in a potential bid for Twitter.
It has been reported that Apollo Global Management is also considering ways it can provide financing to any deal, and is open to working with Musk or any other bidder.