March 24, 2023

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Elon Musk likely to be Twitter's only choice as purchase funding dries up

Elon Musk likely to be Twitter’s only choice as purchase funding dries up

Sources told The Post that Twitter’s agreement to sell itself for $44 billion to Elon Musk looks shaky – but the deal may be the struggling social network’s only option to sell as funding for the purchase dries up amid high interest rates and a collapse in tech stock prices.

Private equity giant Thoma Bravo — a tech-focused company that previously held talks with Musk about a potential joint bid for Twitter — is not preparing for a rival bid if Musk’s $44 billion acquisition of Twitter is terminated, according to sources close to the situation. She said.

As reported by The Post, Orlando Bravo Company In early April they expressed interest in buying Twitter, and then He later partnered with Musk on his Twitter show.

But that was several weeks ago, and the leveraged finance market for massive acquisitions has since stalled, insiders said. As such, it would be nearly impossible for Thoma Bravo — or any other private equity firm, for that matter — to raise the microfinance needed to complete a buyout deal with Twitter’s leverage, according to one of the lending sources.

A spokesman for Thomas Bravo declined to comment.

Analysts have speculated that Elon Musk is either trying to wiggle off the deal altogether or lower the price.

Twitter told its employees this week that it doesn’t care about them Renegotiation of Musk’s $54.20 per share agreementwho earlier this week ramped up his questions about whether Twitter correctly disclosed the percentage of bot accounts on the social network, the sources said.

Analysts have speculated that Musk is either trying to skid off the trade altogether or lower the price. As reported by The Post, earlier this week, Musk .’s SpaceX rocket company Established a stock auction in an attempt to raise 1.25 billion dollars. Insiders have speculated that Musk may be looking to raise funds to buy Twitter through the deal, which cannot be confirmed immediately.

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Musk was trying to raise funds to reduce his personal exposure to Twitter. Currently, he is investing $19 billion in the acquisition including $4 billion of Twitter shares he bought shortly before reaching the merger agreement. The sources said his goal in April was to reduce his exposure to less than $15 billion in total.

Twitter icon
Twitter and its employees say publicly that it is not interested in renegotiating Musk’s $54.20 per share acquisition agreement.

This $19 billion exposure does not include the $6.25 billion that will be loaned out in exchange for some of his Tesla stock.

Meanwhile, Musk’s tireless questioning about Twitter’s monitoring of spam and bots — including Post emoji on tube In response to Twitter CEO Parag Agrawal’s defense of the company’s practices earlier this week — it’s making it harder for him to find more funding in an already challenging lending market, sources said.

“It will be much more difficult to sell debt now that he has questioned his Twitter user base,” said the second lender. “It undermines their finances.”

Another lender with direct knowledge of these conversations said that Musk was trying to sell Twitter’s preferred stock to Apollo Global Management and others to replace some of the small debt he arranged to fund the deal.

Twitter CEO Parag Agrawal
Musk posted a poo emoji in response to Twitter CEO Parag Agrawal’s defense of the company’s practices earlier this week.
Twitter/AFP via Getty Images

Morgan Stanley has committed to lending Twitter $3 billion in start-up funding to support Musk’s purchase. The lender said it was now likely that it would not be able to resell that debt at any price, as banks usually do.

In response, Morgan Stanley is likely to charge Twitter the highest interest rate allowed in Musk’s contract, which could be as high as 12% and possibly more, the lender said.

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The merger agreement expires in October, after which it can be extended for another six months. So if Musk refuses to implement the merger agreement, Twitter could sue him to enforce the contract next spring.

Musk also wrote on Twitter that he remains committed to the April 25 deal. While legal experts say he will be on shaky ground in a bid to scrap it based on Twitter’s disclosures of bots and spam, it’s debatable whether company executives will be excited by the lengthy litigation to enforce the terms of the deal.