Elon Musk has secured additional funding to buy Twitter, according to financial records released on Wednesday, and moved the billionaire closer to completing the high-profile deal.
The Tesla chief said in the regulatory documents that he has increased his personal financing of the purchase from $ 27.3 billion to $ 33.5 billion and secured an additional $ 6.25 billion in equity financing, reducing the debt the entrepreneur would incur in the purchase of $ 44 billion.
The world̵[ads1]7;s richest man is also in talks with shareholders, including former Twitter boss Jack Dorsey, for further funding commitments to fund the deal, he said in the archive.
Musk originally took out a $ 12.5 billion margin loan for shares in his electric car maker Tesla to help fund the purchase of Twitter. But he reduced it to $ 6.25 billion earlier this month after bringing in co-investors.
The latest submission comes after Musk said last week that his offer to buy Twitter would not go ahead until the company shows evidence that spam bots make up less than 5% of the platform’s total users, a move analysts suggest is meant to pressure Twitter to accept a lower selling price.
Details of Musk’s financing plans were announced the day Twitter shareholders gathered for their regular meeting.
A vote on Musk’s plan to buy the social media platform was not on the agenda, but will take place on a date yet to be determined.
Nevertheless, shareholders who put forward voting proposals often called on the name of the Tesla boss.
Investors at the meeting tentatively approved a proposal from the New York State Common Retirement Fund requesting a report on Twitter’s policies and procedures regarding policy contributions using corporate funds.
Two proposals put forward by conservatively inclined groups failed to get enough votes to be adopted. One called for a revision of the company’s “effects on civil rights and non-discrimination” and referred to “anti-racism programs that seek to establish” racial / social justice “as” themselves deeply racist “. The other sought more disclosure about the company’s lobbying activities.
Several proposals talked about the deep existential conflict that has played out among Twitter users, employees and shareholders.
Twitter co-founder Jack Dorsey’s term as a board member expired on Wednesday. Investors re-elected Patrick Pichette, a general partner in Inovia Capital, to the board.
Investors also blocked the re-election of a Musk ally to the board, voting against Egon Durban, co-CEO of private equity firm Silver Lake, who collaborated with Musk on his abandoned bid to take the electric car maker private.
“The Twitter board has not embraced Elon Musk and his vision for Twitter. So the fact that his allies have been removed from the board is not surprising, says Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.
The vote on Durban’s role may indicate skepticism among Musk’s shareholders or his willingness to pay what he offered, but investors are expected to approve the deal overwhelmingly.
Twitter’s board first voted to use a “poison pill” that limited Musk’s ability to increase its stake in the company, but later voted unanimously to accept his takeover bid.
In April, Musk reached an agreement to buy Twitter at $ 54.20 per share. But the Tesla boss said in May that the deal could not go ahead until the platform proved that less than 5% of users were fake accounts or spam accounts.
The sharp turnaround operation makes little sense except as a tactic to reject or renegotiate a deal that is becoming increasingly expensive for him, experts said last week. The fact that the discussions take place in public, no less on Twitter, only contributes to the chaos.
Experts say that Musk can not unilaterally put the agreement on hold. If Musks passes away, he could be on the hook for a $ 1 billion fines. Alternatively, Twitter could sue Musk for forcing him to continue with the deal, although experts believe it is highly unlikely.
Even if shareholders approve the proposal, it will be non-binding, said Donna Hitscherich, a professor of finance at Columbia Business School.
Twitter shares jumped around 6% to $ 39.15 in extended trading.
Musk could not be immediately reached for comment on the details of regulatory findings.