Elon Musk bought himself some time on Thursday, after a judge accepted the billionaire’s request to halt a Twitter lawsuit to allow him to close his proposed $44 billion buyout of the social media company by Oct. 28.
Now comes the big question: how will he pay for it?
Elon Musk said earlier this week he would buy Twitter for $54.20 per share, the price that was agreed in April, but included a condition that the closing of the deal be contingent on debt financing for the transaction coming through.
Tesla shares fell more than 6% on Friday, heading for their worst weekly drop since March 2020, as investors worry Musk may dump more shares after Tesla announces its quarterly earnings on October 19.
Musk has pledged to provide $46.5 billion in equity and debt financing for the acquisition, which covers the $44 billion price tag and closing costs. Banks, including Morgan Stanley and Bank of America Corp, committed to providing $13 billion of debt financing to support the deal.
Experts say banks’ commitments to the deal are firm and tight, limiting their ability to walk away from the contract despite the prospect that they may face major losses.
Twitter on Thursday cited one of the banks as saying that Musk had not communicated to them that he intends to close the transaction. Musk said that banks were “working cooperatively to fund the close” on or around October 28.
Musk’s $33.5 billion equity commitment would include his 9.6% Twitter stake, which is worth $4 billion, and the $7.1 billion he secured from equity investors, including Oracle Corp co-founder Larry Ellison and Saudi Prince Alwaleed bin Talal.
That leaves Musk needing to secure an additional $22.4 billion of funds to cover the equity financing portion of the deal.
