Musk is in talks with investment firm for new financing to buy Twitter, sources say

IT House May 3 news, according to Reuters, Musk is negotiating new financing for the acquisition of Twitter with investment companies, trying to reduce as much as possible in this $44 billion acquisition. investment of personal wealth.

The financing options Musk is said to be discussing include preferred equity investments from private equity firms, as well as high-net-worth individual investors; Musk has begun discussions with some Twitter investors, including Jack Dorsey, on the deal The issue of rolling stock holdings.

IT House understands that Musk can use the new financing to reduce his own equity check payments in the deal.

Musk also pledged the Tesla shares to banks to arrange a $12.5 billion margin loan to help fund the deal. He may seek to downsize the margin loan based on new investor interest in financing the deal, one of the sources said.

Major investors including private equity firms, hedge funds and high-net-worth individuals are in talks with Musk about providing preferred equity financing for the acquisition, the sources said. The preferred stock will pay a fixed dividend from Twitter, just like a bond or loan pays periodic interest, but will appreciate in value with the company’s equity.

Private equity firms such as Apollo Global Management and Ares Management Corp have been in talks to provide financing, the sources added.

Musk is still deciding whether he will share some of his equity checks on the deal with potential partners, according to the source. The source added that Musk is not keen on taking on more debt for the Twitter deal right now.

Musk has also started talking to some of Twitter’s leading investors about the possibility that they would include their stake in the deal and not cash out, one of the sources said. The source added that former Twitter CEO and current board member Jack Dorsey is looking into whether he could take his stake.

The sources requested anonymity, of course, because the matter is classified. Musk, Dorsey, Apollo and Ares did not immediately respond to requests for comment.