A group of investors, including Sequoia Capital, Fidelity Group, crypto exchange Binance, Ellison, and others, have banded together to raise funds to support Tesla CEO Elon Musk’s $44 billion(R706bn) bid for Twitter.
Last month, Twitter BOD agreed to sell the social media platform to an entity solely owned by Elon Musk, the 50-year-old founder and CEO of Tesla and rocket company SpaceX, for $54.20(R 870) per share in cash. Twitter will become a privately held company as a result of the transaction.
So far, $7.14Bn(R114.5bn) has been raised, which is slightly more than a quarter of the total funds required.
Oracle co-founder Larry Ellison, according to a report released on Thursday, gave the largest cheque, valued at $1 billion(R 16bn). According to an updated 13D report, Sequoia has invested $800 million(R12.8bn), VyCapital has invested $700 million(R11.2bn), Binance has invested $500 million(R8bn), and Andreessen Horowitz has invested $400 million(R6.4bn). Notably, no investor has put up more than $1 billion(R16 bn), and large private equity firms have been deafeningly quiet.
Mr. Musk had previously pledged $33.5 billion(R537bn) to the deal in an SEC filing, including $21 billion(R337bn) in equity and another $12.5 billion (R200bn) in margin loans.
Mr. Musk will reduce the margin loan he has taken with a consortium of lenders by half, to $6.25 billion(R104bn), and increase his equity commitment to $27.25 billion (R437bn) with the new finance pledges. The remainder of the purchase price will be paid for with loans obtained from international banks.
Mr. Musk offered to buy Twitter after receiving numerous complaints about content restrictions and a lack of freedom of expression on the site. This action has boosted the value of Twitter stock and Dogecoin. Qatar, on the other hand, is notorious for its poor record on free speech and is one of Musk’s new backers.
Saudi Arabia’s Prince Al Waleed bin Talal Al Saud has agreed to provide nearly 35 million shares in Twitter in order to keep a stake in the company after Musk’s takeover. Based on Musk’s offer price, this comes to about $1.9 billion(R30.5bn).
Mr. Musk’s offer was previously rejected by Saudi Prince Al Waleed, who claimed it did not “come close to the true worth of Twitter given its development prospects.”
Musk stated that he is in talks with a few more existing shareholders, including Twitter co-founder and former CEO Jack Dorsey, to see if they would like to roll their shares over.
Although Mr Musk’s contract is still being negotiated, he has suggested that the service remain free for non-corporate and government users.
According to The Wall Street Journal, Mr. Musk may re-list Twitter after acquiring the social media company. According to the media outlet, which cited sources, he could list Twitter as soon as three years after purchasing it.
The Federal Communications Commission of the United States declared earlier this week that it lacked the authority to intervene in the billionaire’s purchase. The transaction, according to the report, should be welcomed by antitrust regulators because it will increase customer choice and freedom.
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