The most awaited decision is finally settled down as the world’s richest man, Elon Musk, on Tuesday declared that he is going to shut down the Twitter deal by Friday. He announced the following decision on a video conference. He has notified many additional co-investors including banks beforehand to raise funds.
What was the agreement?
Long before, in April, billionaire Elon Musk expressed his intention of buying Twitter at a deal of $44 million. Both parties agreed to make the company private at $54.20 per share. But soon after, he backed out from the deal for which twitter filed a case of breach of contract.
The case was heard by the Delaware court. Although it is clear now that Musk will clear the deal, he is still waiting for the deadline of 28th October to finish off the deal. The deadline was given by the court.
Who are the co-investors?
Elon Musk has asked the other co-investors to cover up the funds to buy Twitter. The co-investors are Sequoia Capital, Binance, Qatar Investment Authority, and others. All the investors have obtained the paperwork from Elon Musk’s lawyer for the agreement of finance. They will need to further sign in the essential manuscripts to completely close the deal.
Other investors include Morgan Stanley and Bank of America Corp who promised to give a loan of $13 billion to help financially in the deal. Equity investors such as Oracle Corp co-founder Larry Ellison and Saudi Prince Alwaleed bin Talal will help with $7.1 billion.
If we have to estimate the total value, then Musk secured $12.5 billion as a loan from the banks. Elon musk had been selling Tesla shares in the market for the past few months. Almost billions of dollars of Tesla stocks have been sold. This was done to cover the finance for the Twitter deal.
The most surprising fact about the deal is that no banks give a high amount of loan to any company to buy another company. But in this case, banks have provided a loan of $13 billion to Elon Musk which is a rare debt given to anyone. According to Business Insiders, this deal would become the largest halted deal ever.
Elon Musk’s mission to turn Twitter into a private company is costing him too much struggle. If he doesn’t close this deal by Friday as the deadline set by the Delaware court, he may have to face further accusations in the trial, or may cost him even more money.
