Elon Musk has secured about $7.1bn of new financing commitments, including from billionaire Larry Ellison, a Saudi Prince, and Sequoia Capital, to help fund his proposed $44bn takeover of Twitter Inc.
The equity commitments from 19 investors come as the Tesla Inc. billionaire marshals capital to bankroll one of the biggest tech industry takeovers. Musk had originally said he planned to fund the deal in part with a $12.5bn loan against his shares in Tesla, the electric-vehicle company he runs.
The new funding will allow him to reduce by half the size of that margin loan to $6.25bn, making the deal less risky for both Musk and his lenders. It also slightly reduces the amount of cash Musk needs to put up personally.
CNBC reported that Musk is expected to serve as temporary chief executive officer of Twitter for a “few months,” after he completes the deal. Saudi Prince Alwaleed bin Talal, chairman of the board at Kingdom Holding Company, made the biggest contribution, agreeing to commit almost 35 million shares in Twitter -worth $1.9bn - to retain a stake in the company following Musk’s takeover, according to an amended securities filing yesterday morning. Ellison, the co-founder of Oracle Corp. who has a big stake in Tesla and a seat on its board, committed $1bn through his trust. Changpeng Zhao, Chief Executive Officer of Binance, which promised $500m, tweeted that it was “A small contribution to the cause.”
With the financing picture becoming clearer, the market seems to be coming around to the idea that the deal will close. The gap between Twitter’s stock price and the $54.20 per share that Musk offered to pay for the company is narrowing to its lowest since April 26.
