Elon Musk disclosed in a filing on April 21 that he has received commitments for $46.5 million in debt financing to buy Twitter, Inc.. The announcement came a week after he launched his hostile takeover bid, and the social media platform reacted with the adoption of a poison pill.
In a week’s time, how did Musk manage to rally the bankers around him?
Musk Details Vision: The Tesla, Inc. CEO shared his vision for Twitter, which went a long way toward convincing a bevy of banks to give commitments, according to a report by Bloomberg.
The banks were apparently impressed by Musk’s plan to increase Twitter’s debt without taking the company’s credit rating to junk levels, the report said, citing people familiar with the plan. The plan introduced in the form of a presentation on a call last Monday detailed Musk’s thoughts on how Twitter’s business could be run and topline could be grown, along with his views on the company’s financial profile.
Musk also spoke directly to some of the top lenders, with his discussion about his plans for Twitter oozing with enthusiasm, the report added.
This was the culmination of efforts since April 9, when Musk’s team approached the lenders and engaged with them through Easter Sunday and into this week, Bloomberg said. Morgan Stanley reportedly coordinated with Musk and the other lenders in facilitating the clinching of the deal.
How The Financing Math Works: Musk has mobilized up to $13 billion in debt financing and $12.5 billion in margin loan commitment from Morgan Stanley, which leads the consortium of 11 other banks. Prominent among the banks that have given funding commitments are Mitsubishi UFJ Financial Group Inc, Bank of America Corp, Barclays PLC, BNP Paribas ADR, and Mizuho Financial Group Inc.
Musk personally has committed to $21 billion in equity financing.
Morgan Stanley’s role as the facilitator does not come as a surprise, given Musk’s suggestion that the Wall Street firm would be the lead adviser in the proposed deal when he announced his interest in Twitter,
By Shanthi Rexaline
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