Elon Musk Has Reportedly Secured $10 Billion For Twitter Deal From ‘Old Friends’
Hiccups in the deal hasn’t prevented Elon Musk from raising some of the necessary funds to buy twitter in other ways.
Despite the fact that private-equity behemoth Thoma Bravo (one of the first organizations to get connected with Elon Musk’s effort to purchase Twitter) pulled out of the transaction, it hasn’t prevented Musk from raising the necessary funds in other ways.
A group of “deep-pocketed” venture firms and family offices, according to a report published Wednesday night by the New York Post, are reportedly close to giving Musk $10 billion (out of a total $44 billion valuation) for his bid to buy Twitter. No one has been named thus far, though the Post did claim they had prior ties to Space X.
The world’s wealthiest man, Elon Musk, has said that he is attempting to keep his personal exposure to Twitter to a maximum of $15 billion (which is a pittance for him). His stated goal is to turn around the company and bring it back into being a public entity again within three years.
A source for the Post stated that Musk “has more than $10 billion of committed equity”, according to the publication. According to a source, Musk had spent “hours” negotiating with Thoma Bravo founder Orlando Bravo, but in the end, one of Bravo’s subordinates (or possibly many of them) ended up torpedoing the transaction, causing it to fall through.
“My sense is Orlando Bravo wanted to do it but one or two of his top partners don’t want to,” a second source said.
Major buyout firms have previously rejected Musk’s offer, or they have said that they would prefer to restrict their exposure to debt financing (like Apollo).
“Other major buyout firms including Stephen Schwarzman’s Blackstone and billionaire Robert F. Smith’s Vista Equity Partners also have turned Musk down altogether, a source said. Apollo Global Management, meanwhile, is only interested in providing debt financing, according to sources close to the talks.” The Post writes.
Musk is said to be working on gathering more than $5 billion in current stock from former Twitter shareholders (including Jack Dorsey and Fidelity), who would be permitted to transfer their shares into the new privately-owned firm if Musk’s proposal is successful.
Several institutions have declared they do not want to be directly exposed to Twitter. Citigroup, Credit Suisse, and RBC have said they’re willing to provide margin loans against Musk’s Tesla shares, but not against Twitter’s equities since the debt load would eat up too much of Twitter’s cash flow. One of the Post’s sources called the Twitter deal’s leveraged financing “crazy.”
Typos, corrections and/or news tips? Email us at Contact@TheMindUnleashed.com