Billionaire Elon Musk has strengthened his involvement offer to buy Twitter with commitments of more than $ 7 billion from a number of investors, including Silicon Valley titans such as Oracle co-founder Larry Ellison.
Other investors include Sequoia Capital Fund, which pledged $ 800 million, and VyCapital, which pledged $ 700 million, according to a presentation to the U.S. Securities and Exchange Commission on Thursday. But Ellison, who is also a board member of Tesla, is making the largest contribution, set at $ 1 billion.
Saudi Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud has pledged 35 million in Twitter shares in support of Musk, according to the presentation.
The new funding comes after Musk, in previous regulatory filings, revealed that he has sold approximately $ 8.5 billion in Tesla shares to help fund the purchase. Musk later tweeted that he has no plans to sell any more of the company’s shares, meaning he would need external commitments to help fund the $ 44 billion deal.
Getting additional sponsors could help ease the way to complete the purchase, Wedbush analyst Dan Ives said in a May 5 research note. Musk, CEO of Tesla and SpaceX, has said he wants to leave Twitter private and redo it as a forum dedicated to promoting free speech.
“In this high-stakes poker game, Ellison and the impressive list of sponsors will eliminate more of Tesla’s shares, as the leverage of Musk’s shares becomes less onerous,” Ives wrote. “This was a smart financial and strategic move by Musk that will be well received at all levels and also shows that the Twitter deal is now on a slippery slope to end later this year.” .
That could help bridge the gap between Musk’s bid price ($ 54.20) and Twitter’s current share price, which closed at about $ 49 a share on Wednesday, Ives said. This disparity indicates that there are still doubts on Wall Street about whether the deal will be made.
Shares of the San Francisco social media platform rose 2% before the opening bell, to $ 50.10.
Due to new funding included in the SEC filing on Thursday, Musk will halve the $ 12.5 billion in margin loans it relied on, to $ 6.25 billion. The transaction is also now funded with $ 27.25 billion in cash and shares, more than $ 21 billion.
Thursday’s presentation also said Musk is in ongoing talks with other parties, including former Twitter CEO Jack Dorsey, who is the second largest individual part of the company after Musk.
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