Elon Musk completed the $44 billion deal announced in April to take Twitter Inc private, assuming ownership of the influential social media platform by immediately firing top executives.
“The bird is freed,” he tweeted in an apparent nod to his desire to see the company has fewer limits on content that can be posted. But Musk provided little clarity on how he will achieve his goals. read more Earlier this month, Musk brought the deal back on the table after previously trying to walk away from it. Musk had said he was excited to buy Twitter but he and his co-investors are overpaying.
Musk pledged to provide $46.5 billion in equity and debt financing for the acquisition, which covered the $44 billion price tag and the closing costs. Banks, including Morgan Stanley and Bank of America Corp, committed to provide $13 billion in debt financing.
Experts have said commitments from banks to the deal were firm and tight, limiting their ability to walk away from the contract despite the prospect that they may face major losses.
Musk’s $33.5 billion equity commitment included his 9.6% Twitter stake, which is worth $4 billion, and the $7.1 billion he had secured from equity investors, including Oracle Corp co-founder Larry Ellison and Saudi Prince Alwaleed bin Talal.
Musk needed an additional $22.4 billion in funding to cover the equity financing portion of the deal.
Apollo Global Management Inc (APO.N) and Sixth Street Partners have pulled their offers since the co-backers were revealed.
According to Forbes, Musk, 51, is the world’s richest person, with a net worth of $222 billion, but a large portion of his fortune is tied to his stakes in Tesla and Space X.
According to Reuters, Musk had approximately $20 billion in cash after selling a portion of his stake in Tesla in multiple transactions in November and December of last year, as well as April and August of this year.
To complete the financing for the deal, Musk would have needed to raise an additional $2 billion to $3 billion.
It was not immediately clear how Musk bridged a $3 billion funding gap. Wedbush analyst Daniel Ives speculated that it could be outside capital because no Form 4s were filed this week, and that it could be an investor who is already invested in the deal.
Musk was widely expected to sell more Tesla stock in the nine days between the electric automaker’s earnings report on Oct. 19 and the deal’s deadline on Oct. 28. So far, no sale has been announced.
(Adapted from EconomicTimes.com)