ELON MUSK now has access to the billions of dollars he’d need to take over Twitter.
Tesla CEO Elon Musk has received “commitment letters” that legally promise an aggregate of approximately $46.5 billion, according to a new SEC filing.
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The funds are enough to “finance the Proposed Transaction or a Potential Offer,” per the legal document, which was filed on Wednesday.
Musk, addressed in the filing as the ‘Reporting Person’, is exploring whether to go forward with a ‘tender offer’ due to Twitter’s lack of response to his purchasing offer of $43 billion.
A ‘tender offer’, often referred to as a ‘public takeover’, describes a scenario when an entity acquires a company’s remaining shares of common stocks.
Should Musk move forward with the Twitter ‘takeover’, he would be paying a price of $54.20 per share.
The filing by Musk comes shortly after Twitter’s board of directors unanimously decided to employ a “poison pill’ strategy.
Aimed at deterring a hostile takeover, this plan would come into play if a single entity acquires at least 15 percent of Twitter’s outstanding common stock without the board’s approval.
Once set in motion, then certain shareholders will have the opportunity to buy more stock.
This will, in turn, do two things: Flood the market with new shares and dilute external investors’ holdings.
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The ‘poison pill’ plan is set to be in place until April 2023.
Earlier this month, Musk became the single largest shareholder of Twitter when he purchased 9.2 percent of its stock.
Things got heated, however, when the Tesla CEO rejected a seat on its board – had Musk accepted a seat, he would not have been allowed to own more than 15 percent of shares.
Shortly after, Musk made an offer to buy the company for $54.20 per share in cash.
And in a sensational twist in the saga, Musk then threatened to pull out as a shareholder if his offer was not accepted, adding that he “would need to reconsider [his] position”.
Musk has ambitions of owning the social media platform, on which he boasts more than 83 million followers because he believes it needs an internal revamp.
He has stated that the social media company needs to go private to see effective changes.
In the past, he also slammed the social network for how it handles free speech.
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