Topline
Elon Musk told the banks that are partially funding his $44 billion Twitter acquisition he plans to close the deal by Friday, a deadline set by Delaware state court judge, Bloomberg reported Tuesday, as the world’s wealthiest man finally seems set on purchasing the social network after a very public case of buyer’s remorse.
According to reports, Elon Musk called his bankers Monday morning to inform them that the deal for Twitter is in place.
Here are some key facts
According to Bloomberg sources, Musk announced the details during a video conference call on Monday with bankers.
Barclays, Bank of America, Morgan Stanley and Bank of America are the principal financiers. Each has committed at least $2.5 Billion in debt financing to the deal.
Bloomberg reported that banks would set aside cash for Thursday.
Musk had until Friday to complete the acquisition, or he would be forced to face Twitter in a trial at Delaware’s Chancery Court as part of the company’s lawsuit to push through the deal.
Important Background
In total, Musk secured $12.5 billion in loans from the banks, with the rest of the funds coming from his own horde of cash, which has swelled as he sells tens of billions of dollars in Tesla stock, and a slew of equity investors, including billionaires Marc Andreesen and Larry Ellison and Qatar’s sovereign wealth fund. In April, Twitter accepted Musk’s unsolicited offer to take the company private at $54.20 per share before the parties became entangled in a six-month legal tug-of-war, with Musk trying to pull out of the deal as Twitter sued him to close the acquisition.
Surprising Truth
According to reports, the banks will keep $13 billion of debt. They also face a possible loss of $500 million on every sale. Wall Street JournalReuters and Reuters is a rare move for debt financiers. According to Business Insider, this would be the biggest stalled transaction ever.
Important Quote
“They’re big boys, they can deal with it,” JPMorgan Chase Dimon told CNBC earlier this month when asked about his rivals potentially taking a massive loss with Twitter.
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Factbox: Who funds Elon Musk’s purchase of Twitter for $44 billion? (Reuters)
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