Billionaire business person and Tesla CEO Elon Musk has secured new financial commitments of around $7.1 billion to move forward with his proposed $44 billion takeover of social media giant Twitter, as per an amended securities filing on Thursday, 5 May.
The commitments have come from 19 investors to finance the takeover, which is one of the biggest in the tech industry.
Saudi Prince Alwaleed bin Talal made the biggest commitment of around 35 million shares in Twitter, worth $1.9 billion, to retain a stake in the entity after Musk takes over, Bloomberg reported.
Talal had also put out a tweet, saying that he was looking forward to join his "new friend" Musk in this "exciting journey."
US Business Person Commits $1 Billion
The prince had earlier rejected Musk's bid, saying that it did not come "close to the intrinsic value of Twitter."
Billionaire business magnate Larry Ellison made a commitment of $1 billion dollars through his trust. Ellison, who is the co-founder of Oracle Corp and a major Republican donor, also has a big stake in Tesla and is one of the company's board members. He had also hosted a massive fundraiser for former United States (US) President Donald Trump in 2020.
Sequoia Capital is putting up around $800 million, while Silicon Valley venture capitalist Marc Andreessen has committed $400 million.
Other investors include the largest crypto exchange in the world Binance Holdings Ltd, Brookfield Asset Management, Qatar Holding and Fidelity Management.
Changpeng Zhao, CEO of Binance Holdings Ltd, which committed $500 million, said in a tweet that they were making "a small contribution to the cause." On the other hand, Qatar Holding has committed $375 million.
Incoming Finances Make Deal More Likely to Close
With the financial commitments coming in, the likelihood of the deal closing becomes even clearer. The gap between Twitter's share price and Musk's offer of $54.20 per share to pay for the company has narrowed to its lowest since 26 April.
Musk had initially said that he would fund the deal partly with a loan of $12.5 billion against his shares in Tesla. The incoming finances would allow him to reduce the size of that loan by half to $6.25 billion – thus making the proposition less risky for Musk and his lenders.
The deal is scheduled to conclude later this year, while both sides have agreed to shell out a break-up fee of $1 billion if it falls apart.
Musk has vowed to secure around $21 billion worth of equity for the deal. As per the amended securities filing, that number increased to $27.25 billion. The business person has also sold Tesla shares of around $8.5 billion to finance the takeover.
Musk is also in talks with former Twitter CEO Jack Dorsey regarding contributions of some of his shares for the takeover, as per Bloomberg.
(With inputs from Bloomberg.)
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