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Musk Files With SEC Outlining $7.1B In New Financing For Twitter Purchase

Elon Musk on Thursday submitted an SEC filing outlining more than $7.1 billion in new equity financing for his $44 billion Twitter takeover, receiving funding commitments from a crown prince, multibillionaires, cryptocurrency exchanges and more.

MuskPhoto Credit: Shutterstock

Musk disclosed that Saudi Arabia’s Prince Alwaleed bin Talal, Qatar’s sovereign wealth fund and Binance, the world’s biggest cryptocurrency exchange, were part of a collective of investors that will assist in paying for the acquisition of Twitter.

In a filing with the U.S. Securities and Exchange Commission, Musk listed $7.14 billion in financing, of which Oracle founder and billionaire Larry Ellison’s trust is contributing $1 billion. News of the funding comes 10 days after Musk, who’s the richest man in the world and CEO of Tesla, struck a deal to take the social media platform private for $54.20 a share.

The deal gained these new commitments as it awaits antitrust and securities vetting by regulators in addition too shareholder approval. The transaction deadline for both sides to adhere to the details of the merger agreement is October 24.

It was initially unclear how Musk would approach funding such an enormous deal after launching his bid to buy the social media giant in April. Twitter responded to the offer by approving a “poison pill,” a mechanism making it much more costly for any investors from outside the company to acquire more than 15% of the company.

Musk informed regulators on April 21 that he had a sum of $46.5 billion earmarked for the deal, including $21 billion in equity from himself and $25.5 billion in debt financing from various banks. Following short negotiations, Twitter’s board unanimously accepted Musk’s offer on April 25.

In addition to Oracle Corp. founder, chairman and chief technology officer Ellison, additional equity commitments for the deal includes $500 million from global cryptocurrency exchange Binance, $250 million from Brookfield and $400 million from Andreessen Horowitz, also known as a16z.

Sequoia Capital Fund LP is contributing $800 million for the deal, and Fidelity Management & Research Company LLC is investing a little over $316 million.

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Source: https://www.law360.com/articles/1490412

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