Musk gets $7bn backing for Twitter bid from tech heavyweights

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Musk Gets $7Bn Backing For Twitter Bid From Tech Heavyweights
Elon Musk, © AP/Press Association Images
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Michelle Chapman, Associated Press

Billionaire Elon Musk has strengthened the equity stake of his offer to buy Twitter with commitments of more than $7 billion from a range of investors, including Silicon Valley heavy hitters like Oracle co-founder Larry Ellison.

Other investors include Sequoia Capital Fund, which pledged $800 million, and VyCapital, which pledged $700 million, according to a Thursday filing with the US Securities and Exchange Commission (SEC).

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But Mr Ellison, who is also a Tesla board member, is making the biggest contribution, pegged 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 filing.

Musk in earlier regulatory filings revealed that he has sold roughly $8.5 billion of shares in Tesla to help fund the purchase.

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He later tweeted that he does not plan any further sales of the company’s shares, meaning he would need outside commitments to help fund the $44 billion deal.

Because of the new funding listed in the SEC filing on Thursday, Musk will half the $12.5 billion in margin loans he was leaning on to $6.25 billion.

The transaction is now also being funded by $27.25 billion in cash and equities, up from $21 billion.

The Thursday filing also said that Musk is in ongoing talks with other parties including former Twitter CEO Jack Dorsey, who is the second-largest individual stakeholder in the company after Musk.

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“This was a smart financial and strategic move by Musk that will be well received across the board and also shows the Twitter deal is now on a glide path to get done by the end of this year,” wrote analyst Dan Ives who follows Twitter for Wedbush.

Shares of Twitter have remained below the per-share offering bid by Musk of $54.20 because there are still doubts on Wall Street about whether the deal will go through.

Shares of the San Francisco social media platform rose 2 per cent before the opening bell, to $50.10 dollars.

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