Elon Musk has outlined his plan for buying Twitter outright and turning the social media company private.
The world’s richest man has assembled a $46 billion (£35 billion) financing package that he’d use to form a levereged buyout of Twitter.
This comes after his initial $43 billion offer to take Twitter private has yet to be responded to.
According to the Financial Times, Musk has taken $25.5 billion in debt (part of which is a $12.5 billion margin loan against his Tesla stock) from a group of bankers. This group is led by Morgan Stanley, which also serves as Musk’s financial advisor.
Meanwhile, Musk himself will personally provide another $21 billion of equity to make up the sum. That’s according to paperwork filed with the US Securities and Exchange Commission.
Twitter’s board of directors, meanwhile, definitely doesn’t want this to happen.
Last week they announced it had approved a shareholder rights plan, commonly called a ‘poison pill defence’ to stop Musk from gaining control.
The plan allows existing Twitter shareholders to purchase discounted stock in the event of an entity or person acquiring more than a 15% stake in the company without the board’s approval.
At present, Musk has 9.2%.
As well has having his hands full with Tesla and SpaceX, Elon seems convinced that he can enact the changes required at Twitter if he can take it private.
‘I believe free speech is a societal imperative for a functioning democracy,’ Musk said in the initial filing when his first bid was revealed.
‘I now realize the company will neither thrive nor serve this societal imperative in its current form.’
Who owns Twitter now?
Essentially, Twitter Inc. is owned by lots of shareholders – so no one person owns the entire company.
It’s a ‘public’ company, as its shares are available for anyone (with enough money) to buy on the stock exchange – whereas just a few individuals or groups owning it would make it ‘private’.
The group with the highest stake, according to the Wall Street Journal, is Vanguard Group, an American investment company that is one of the world’s biggest.
As of April 15, Vanguard Group is believed to own some 82.4 million shares, which works out as 10.3% of the company.
The second-largest shareholder is Musk with 73.5 million shares. What other shares remain belong to myriad financial groups, including Morgan Stanley and BlackRock Inc.
And original co-founder and former Twitter CEO Jack Dorsey currently owns 2.25% of Twitter.
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