Elon Musk has secured additional funding to buy Twitter, according to financial documents released Wednesday, bringing the billionaire closer to completing the high-profile deal.
Tesla’s chief executive said in regulatory documents that he had increased his personal financing for the purchase from $ 27.3 billion to $ 33.5 billion and provided additional $ 6.25 billion in equity financing, reducing the amount of debt the developer would take over the $ 44 billion purchase.
The world’s richest man is also in talks with shareholders, including former Twitter CEO Jack Dorsey, over additional financial commitments to fund the deal, he said in a statement.
Musk initially took out a $ 12.5 billion margin on shares of his electric car maker Tesla to help fund the purchase of Twitter. But he cut it to $ 6.25 billion earlier this month after attracting co-investors.
The latest submission comes after Musk said last week that his offer to buy Twitter will not continue until the company shows evidence that spam bots account for less than 5% of the platform’s total users, a move analysts predict , aims to push Twitter to accept a lower selling price.
Details of Musk’s financial plans were made public on the day Twitter shareholders gathered for their regular meeting.
The vote on Musk’s plan to buy the social media platform was not on the agenda, but will take place on an as yet undetermined date.
However, shareholders who put forward voting proposals often referred to the name of Tesla’s CEO.
Investors at the meeting preliminarily approved a proposal from New York’s general pension fund, which called for a report on Twitter’s policies and procedures on political contributions using corporate funds.
Two proposals submitted by conservative groups failed to garner enough votes for adoption. One called for an audit of the company’s “impact on civil rights and non-discrimination” and described “anti-racism programs that seek to establish” racial / social equality “” as “they themselves are deeply racist”. The other asked for more information about the company’s lobbying activities.
Several proposals spoke of the deep existential conflict that is taking place among Twitter users, employees and shareholders.
Twitter co-founder Jack Dorsey’s term as board member expired on Wednesday. Investors re-elected Patrick Pichet, general partner at Inovia Capital, on the board.
Investors also blocked the re-election of Musk’s ally on the board, voting against Egon Durban, co-chairman of private investment firm Silver Lake, who partnered with Musk in his abandoned bid for a private electric car maker.
“Twitter’s board has not embraced Elon Musk and his vision for Twitter. So the fact that his ally has been removed from the board is not surprising, “said Kim Forest, chief investment officer at Bokeh Capital Partners in Pittsburgh.
Voting for Durban’s role may indicate skepticism among shareholders about Musk’s plan or his willingness to pay for what he offers, but investors are expected to approve the deal by an overwhelming majority.
The Twitter board initially voted to adopt a “poison pill” that limited Musk’s ability to increase its stake in the company, but later voted unanimously to accept his buyout offer. In April, Musk struck a deal to buy Twitter for $ 54.20 a share. But Tesla’s chief executive said in May that the deal could not continue until the platform proved that less than 5 percent of its users were fake or spam accounts.
The sharp turnaround makes no sense except as a tactic to fail or renegotiate a deal, which is becoming more and more expensive for him, experts said last week. The fact that the discussions are held in public, no less on Twitter, only adds to the chaos.
Experts say Musk cannot postpone the deal unilaterally. If Mux leaves, he could be on the hook for a $ 1 billion separation fee. Alternatively, Twitter may sue Musk to force him to continue the deal, although experts believe that is very unlikely.
Even if shareholders approve the proposals, they will not be binding, said Donna Hitcherich, a finance professor at Columbia Business School.
Shares of Twitter jumped about 6% to $ 39.15 in long-term trading.
Musk could not be found immediately to comment on the details of the regulatory finding.
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