Elon Musk confirmed Thursday that he raised more than $46.5 billion to fund his potential hostile takeover of Twitter, which he hopes will turn the social network into a 100% private company.
In one of the latest Securities and Exchange Commission (SEC) filings, Musk stated that Twitter’s board did not respond to his emails telling them of his plan to take the company private, so he opted to make an offer directly to the company’s shareholders. On April 14, Musk made a $43.5 billion offer to buy 100% of Twitter.
Musk claims to have secured $21 billion through the sale of shares from his portfolio, as well as having secured an additional $13 billion loan from investment bank Morgan Stanley. According to the SEC filing, the latter entity would be willing to lend him an additional $12.5 billion.
Last year, Musk sold more than $5 billion of his Tesla shares, his current stake in the electric car company equaling $177 billion. Musk is also the sole owner of Space X, the space rocket company that works directly with NASA and has become a key player in the satellite market.
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Elon Musk warned Twitter’s board of directors of his intentions to take the company 100% private.
According to The Wall Street Journal, turning Twitter into a private company is a difficult task. In the past, different investment funds have explored this possibility, which time and again has been dismissed.
In an email sent to Bret Taylor, chairman of Twitter’s investor board, Musk states that:
“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy.”
“However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company,” Musk states in the missive.
“My offer is my best and final offer and if it is not accepted, I would need to reconsider my position as a shareholder,” Musk warns in the missive and concludes with, “Twitter has extraordinary potential. I will unlock it.”
In a final message to Taylor, Musk warns the Twitter board manager that, “This is not a threat, it’s simply not a good investment without the changes that need to be made and those changes won’t happen without taking the company private.”
Apparently, Twitter’s board does not look favorably on Musk’s offer and has preferred to take a series of legal maneuvers to exercise shareholder rights. This package of legal remedies was created by attorney Martin Lipton in 1982 and is used by companies to shield themselves in the event of a “hostile takeover.”
Twitter’s poison pill consists of a policy that, in case there is a risk that one person could acquire more than 15% of the company, allows other shareholders to buy shares at half price and thus avoid a hostile takeover.
According to a recent SEC report, the Vanguard group dethroned Musk as Twitter’s largest shareholder, raising its stake to 10.3% of the company’s value. Other Twitter shareholders, including the Saudi Crown, are also skeptical of selling their stake to the Tesla CEO.