Elon Musk promises bankers he’ll close the US$44 billion Twitter deal by Friday

Elon Musk promises bankers he’ll close the US$44 billion Twitter deal by Friday
FILE PHOTO: The logo and trading symbol for Twitter is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., July 11, 2022. REUTERS/Brendan McDermid

Tesla CEO Elon Musk has been flip-flopping back and forth about buying Twitter for months. When he threatened to pull out of the purchase, Twitter decided to take him to court. But recently, the court put the lawsuit on hold, giving Musk until Friday to close the deal or else it’s back on. The Biden administration has also considered putting Musk’s Twitter deal under national security reviews because of its foreign investors. Officials haven’t been too happy with his seemingly pro-Russian comments and threats to pull Starlink from Ukraine, either.

On Monday, Musk promised the bankers helping with the deal that he would close the acquisition once and for all by 5 p.m. this Friday, according to people familiar with the situation. Musk’s determination this time is that court-issued deadline for closing the deal. Big banks, including Morgan Stanley, are funding US $13 billion in debt financing to finalize Musk’s takeover of Twitter. But, with the soaring inflation, fears of recession and a spiked average cost of borrowing, the bank expects around US$500 million in losses on the transaction. So, on the call, Musk also promised to help them market the debt to money managers after the deal closes.

Either way, Twitter is facing a new era of uncertainty – from the possible national security review because of financial backers like Saudi Prince Alwaleed bin Talal and the Chinese-owned crypto exchange Binance to Musk’s comments on firing about 75% of the company’s staff.

Key comments

“They’re big boys, they can deal with it,” said JPMorgan Chase Dimon to CNBC about other big banks potentially taking a huge loss with Twitter’s deal.

“Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated,” Musk said in a statement in April. He added he would “make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans.” Separately, Musk tweeted: “I hope that even my worst critics remain on Twitter, because that is what free speech means.”

“The Twitter Board conducted a thoughtful and comprehensive process to assess Elon’s proposal with a deliberate focus on value, certainty, and financing,” said Bret Taylor, Twitter independent board chair, in a statement in April. He referred to the acquisition as ” the best path forward for Twitter’s stockholders.”