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20 May 2022

Musk gets seven billion dollar backing for Twitter bid from tech heavyweights

Musk gets seven billion dollar backing for Twitter bid from tech heavyweights

Billionaire Elon Musk has strengthened the equity stake of his offer to buy Twitter with commitments of more than 7 billion US dollars (£5.65 billion) from a range of investors, including Silicon Valley heavy hitters like Oracle co-founder Larry Ellison.

Other investors include Sequoia Capital Fund, which pledged 800 million dollars (£646 million), and VyCapital, which pledged 700 million dollars (£565 million), according to a Thursday filing with the US Securities and Exchange Commission (SEC).

But Mr Ellison, who is also a Tesla board member, is making the biggest contribution, pegged at one billion dollars (£807.5 million).

Saudi Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud has pledged 35 million dollars (£28 million) in Twitter shares in support of Musk, according to the filing.

Musk in earlier regulatory filings revealed that he has sold roughly 8.5 billion dollars (£6.9 billion) of shares in Tesla to help fund the purchase.

He later tweeted that he does not plan any further sales of the company’s shares, meaning he would need outside commitments to help fund the 44 billion dollar (£35.5 billion) deal.

Because of the new funding listed in the SEC filing on Thursday, Musk will half the 12.5 billion dollars (£10.1 billion) in margin loans he was leaning on to 6.25 billion dollars (£5.05 billion).

The transaction is now also being funded by 27.25 billion dollars (£22 billion) in cash and equities, up from 21 billion dollars (£16.7 billion).

The Thursday filing also said that Musk is in ongoing talks with other parties including former Twitter CEO Jack Dorsey, who is the second largest individual stakeholder in the company after Musk.

“This was a smart financial and strategic move by Musk that will be well received across the board and also shows the Twitter deal is now on a glide path to get done by the end of this year,” wrote analyst Dan Ives who follows Twitter for Wedbush.

Shares of Twitter have remained below the per-share offering bid by Musk of 54.20 dollars (£43.77) because there are still doubts on Wall Street about whether the deal will go through.

Shares of the San Francisco social media platform rose 2% before the opening bell, to 50.10 dollars (£40.46).

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