The Fate of Elon Musk’s Deal to Buy Twitter Now Comes Down to the Money
The countdown is now on for Elon Musk and Twitter to close their $44 billion acquisition deal by October 28 or be forced to again prepare for a trial after a judge agreed on Thursday pause the legal proceedings.
As reported by CNN, what everyone is now waiting on: Musk needs to actually have the money to hand over.
Even the world’s richest man needs a little help for an acquisition of this size. In April, Musk announced he had lined up $46.5 billion in financing for the deal, including two debt commitment letters from Morgan Stanley and other unnamed financial institutions (one for $13 billion and another for $12.5 billion, the latter of which was later reduced to $6.25 billion). Musk himself also committed approximately $21 billion in equity to fund the deal, and later raised an additional $7 billion in equity from investors such as Oracle founder Larry Ellison and cryptocurrency firm Binance.
Much of the sticking point between Musk and Twitter (TWTR) now appears to be over uncertainty around the status of those financing arrangements.
Musk’s team had said in a filing earlier Thursday that there was no need to press on with the ligation because he had committed to closing the deal at the originally agreed upon terms and the banks that had committed debt financing to help him pay for it were “working cooperatively to fund the close.”
Twitter — skeptical after Musk spent months trying to get out of the deal and also wanting to keep the pressure of a trial hanging over him — opposed pausing the proceedings. It raised concerns in a separate filing that an unnamed representative of one of the banks had testified Thursday morning that Musk had not yet sent a borrowing notice and “has not otherwise communicated to them that he intends to close the transaction, let alone on any particular timeline.” Twitter also said Musk should close the deal by next week.
Many legal experts think Musk really is planning to close the deal this time, the most certain anyone has sounded since he first said the deal was “on hold” in May and moved to terminate the agreement in July. Many following the case think that Musk saw the writing on the wall that he was likely to lose at trial and be forced to buy Twitter anyway — spending more money and further damaging the company he would ultimately have to take over in the process.
