Elon Musk’s threat to abandon the $ 44 billion Twitter acquisition has halted his efforts to arrange funding to help him complete the deal, according to reports.
On Monday, Musk accused Twitter of violating its contract with him by failing to provide information about spam accounts – and again threatened to abandon its $ 44 billion takeover deal.
Musk is threatening to cancel the deal unless the social media company provides him with data to support his assessment that fake or spam accounts make up less than 5% of its user base.
Lawyers for the world’s richest man wrote that Twitter has refused to provide information that “would facilitate its assessment of spam and fake accounts on the company’s platform,” according to a strict letter to Twitter submitted to the Securities and Exchange Commission.
Musk’s lawyers argued that the alleged opposition to Twitter was “a clear breach of Twitter’s obligations under the merger agreement.”
Musk is on the hook to pay $ 33.5 billion in cash to finance the deal after settling debt financing to cover the rest.
His liquidity is limited, given that his fortune, estimated by Forbes at $ 218 billion, is largely tied to shares in Tesla, the electric car maker he runs.
In April, Musk and the Twitter board reached an agreement to acquire $ 44 billion in total in cash. Twitter
Musk was involved in discussions with a group of private investment companies led by Apollo Global Management, which was reportedly ready to provide between $ 2 billion and $ 3 billion in preferred equity financing, Reuters reported.
These talks have now been suspended, according to Reuters.
The pause in the discussions is the last sign that Musk’s threats are delaying the completion of the deal.
Musk and Twitter spokesmen did not respond to requests for comment. Apollo declined to comment.
After Twitter’s board reached an agreement with Musk to sell the company in a $ 45.20 cash share deal, Tesla’s chief executive sold $ 8.5 billion worth of shares in the electric car maker.
He raised $ 7.1 billion from a group of co-investors in equities to reduce his contribution.
Musk also tried to further reduce that exposure by arranging a risky $ 12.5 billion margin loan tied to Tesla shares, but then declined last month.
Preferred equity will pay a fixed dividend from Twitter, in the same way that a bond or loan pays regular interest, but will increase according to the value of the company’s equity.
With postal wires
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