Elon Musk Twitter bid hints his ‘final’ price maybe not so final
Elon Musk has said his $54.20 per share offer for Twitter Inc. was his “best and final.” While that may prove true, he just signaled that he might go higher.
The billionaire announced in a filing on Thursday that he’d secured $46.5 billion in funding for a bid to buy the social media company. That includes $25.5 billion in debt financing supported by more than a dozen investment banks, as well as a $21 billion equity commitment from himself.
That’s about $9 billion more than what the Tesla Inc. co-founder would need to acquire the 91% of Twitter he doesn’t already own, according to Bloomberg calculations, suggesting he’s giving himself room to increase the offer if it comes to that.
Excluding transactions costs, $46.5 billion equates to almost $64 a share, or 18% higher than Musk’s last offer. That’s closer to the $70 a share that Twitter traded at a year ago, and might be more attractive to the company’s board, which adopted a poison pill defense after receiving Musk’s initial unsolicited bid.
The analysis assumes that the $21 billion equity commitment portion doesn’t include the contribution of Musk’s existing Twitter stake. If included, it would bring down the premium over $54.20 a share indicated by the funding commitment.
The higher price would also be more appealing to Twitter’s investors if he moves ahead with a tender offer, said Bloomberg Intelligence analyst Mandeep Singh.
“You have to go a little higher than your M&A price” Singh said. “That’s what really drives the smaller shareholders to tender their shares.”
Documents in Thursday’s securities filing support the idea that a higher offer has been contemplated. The margin lending agreement says that a higher acquisition price for Twitter isn’t a reason for the
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