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Musk pledges more equity to fund Twitter deal, scraps margin loan

Musk pledges more equity to fund Twitter deal, scraps margin loan

Elon Musk arrives at the In America: An Anthology of Fashion themed Met Gala at the Metropolitan Museum of Art in New York City, New York on May 2, 2022. (Photo: REUTERS/Andrew Kelly)

Elon Musk on Wednesday (May 25) pledged an additional US$6.25 billion in equity financing to fund the US$44 billion offer for Twitter, reducing the billionaire's margin loan against his Tesla Inc shares to zero.

The disclosure made in a regulatory filing on Wednesday signaled Musk is working to complete the deal even though he had last week linked its progress to Twitter presenting proof that spam bots accounted for less than 5 per cent of the total users.

While doubting that spam bots accounted for at least 20 per cent of the users, the world's richest man and Tesla top boss had suggested he could seek a lower price for the social media company.

 

Musk said on Wednesday he was also in talks with shareholders, including Jack Dorsey, for additional financing commitments to fund the deal.

Twitter shares jumped around 6 per cent to US$39.15 in extended trading. Musk could not be immediately reached for comment.

He initially took a US$12.5-billion margin loan, but earlier this month reduced it to US$6.25 billion after bringing in co-investors.

In April, Musk had lined up US$46.5 billion in debt and equity financing to buy Twitter, with Musk himself committing US$33.5 billion.

After Musk's offer, Twitter's board initially voted to adopt a poison pill that limited his ability to raise his stake, but later voted unanimously to accept his buyout offer.

Twitter last week said it was committed to the deal at the agreed price of US$54.20. Separately, at an annual shareholder meeting on Wednesday, Twitter investors blocked the re-election of an ally of Musk to its board.

Source: Reuters/ic

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