By Cristian Bustos. Originally published at ValueWalk.
Elon Musk is plotting a bigger hostile bid to take Twitter Inc (NYSE:TWTR) out of the market and become its sole owner. The billionaire has secured $46.5 billion in funding, which he will add up to $21 billion of his own money to create a mouthwatering package.
A Bigger Offer
As reported by The Guardian, Elon Musk is also raising a further $12.5 billion to include in his offer through a margin loan with his Tesla Inc (NASDAQ:TSLA) shares as a warranty, with Morgan Stanley (NYSE:MS) “leading a group of financial institutions providing $13 billion in debt financing.”
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The funding was disclosed via a filing with the Securities and Exchange Commission on Thursday, which also revealed Musk was weighing a tender offer for the Twitter stock he does not own.
Such an offer would be deemed as hostile since it circumvents the Twitter board, which has made its move to block Musk’s attempts to grow its stake at the company without its consent —in a normal acquisition, the board is expected to endorse an offer to shareholders.
To parry Elon Musk’s hostile takeover bid, Twitter employed a “poison pill” by which any investor wanting to expand their stake in the company to 15%, the other shareholders could acquire an additional share for each share they own at a lower price.
Analysis
According to Dan Ives, a senior analyst at the US financial firm Wedbush Securities, “This will put pressure on the board if a groundswell of shareholders tender their shares and could force removal of poison pill and a sale to Musk.”
Besides announcing the protective move, Twitter has not officially responded to Elon Musk’s $43 billion bid last week.
On Thursday, however, the company said, “As previously announced and communicated to Mr. Musk directly, the board is committed to conducting a careful, comprehensive, and deliberate review to determine the course of action that it believes is in the best interest of the company and all Twitter stockholders.”
Musk defines himself as a free-speech endorser and his takeover bid is seen by some Twitter employees as a threat to the content moderation policies the company has carefully designed and implemented in the last couple of years.
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