In the outgoing week, it became known that Elon Musk, who expressed his intention to buy Twitter for $43 billion, was able to prepare $46.5 billion for the relevant purposes in record time, using mainly borrowed funds. Experts say that it cost the billionaire a lot of effort; given the conditions under which this deal is in preparation.
To start with, as Bloomberg notes, until the board of directors has given its response to Musk’s proposal; the likely takeover cannot be friendly, and therefore creditors do not have access to Twitter’s financial statements.
Musk, in an attempt to raise funds to buy Twitter in a matter of days instead of the usual weeks, was able to sway the leadership of 12 credit institutions to approval, both through presentations in which he described his ideas for the further development of the social network, and through direct communication via video conferencing. Part of the negotiations took place at a later time, partly for this reason; the funds were available just a few days after Musk’s appeal.
Getting financial guarantees to buy Twitter cost Elon Musk a lot of effort
Of course, the financing structure of the deal also speaks to the rush in which everything was prepared. In particular, Musk managed to receive only $13 billion in the form of loans, another $12.5 billion was allocated on the security of Tesla shares; and the remaining $21 billion was raised solely by exchanging these same shares for cash. In fact, the willingness of banks to allocate more than half of the required amount in the form of loans speaks to the ability of Elon Musk to convince creditors that he can turn this social network into a profitable prosperous business if he gains control of Twitter. What the billionaire’s proposals were, the source does not disclose due to the confidentiality of such information. Musk will reportedly not hesitate if he has to sell more shares of Tesla to finance the Twitter purchase.
A group of 18 US congressmen sent a letter to Twitter asking them to save all records and materials related to the proposal of the head of Tesla and SpaceX, Elon Musk, to buy the platform. Perhaps these documents will form the basis for further investigation.
The move is an intention to initiate an investigation into Twitter if the company rejects Musk’s proposal; although the document itself does not mention such a measure. Earlier in an interview, Jordan expressed hope that the businessman would be able to complete the deal.