Elon Musk turns to old financial backers for $44 billion to buy Twitter: sources

Elon Musk is turning to an old and trusted group of financial backers to fund his $44 billion takeover of Twitter — even as talks with a deep-pocketed private equity firm falter, The Post has learned.

Sources close to the situation say Musk may be close to raising $10 billion in cash from co-investors — mostly venture capital firms that have backed his other companies including Space X. One source close to the talks declined to name the companies, but Musk’s investors included The former are Sequoia Capital, D1 Capital Partners, and Valor Equity Partners.

Musk has also turned to so-called family offices that control large pools of private money to support his Twitter bid.

He has more than $10 billion in committed stock, a source close to the situation told The Post.

A source said billionaire Orlando Bravo spent hours talking to Elon Musk.
left: AP; Right: Getty Images

Musk continues to press ahead even as senior executives at Thoma Bravo — a technology-focused acquisition whose investments include software companies like McAfee and Barracuda — are divided over partnering with Musk in the deal, with some fearing the bet, three sources close to The situation is very big and very dangerous.

“Orlando Bravo was paying for it,” said one of the sources close to the talks, referring to the company’s co-founder, a 52-year-old Puerto Rican billionaire with a track record among tech investors. “He spent hours talking to Elon.”

A source said Bravo was “pressing” for his company to support Musk.
AFP via Getty Images
Elon Musk
The volatility between private equity investors and banks is putting pressure on Musk to raise money elsewhere.
AFP via Getty Images

On Tuesday, the Wall Street Journal reported that Musk was telling investors he aimed to go public again within three years of the acquisition. As previously reported by The Post, Thoma Bravo sees an opportunity to cut costs on Twitter and has been hoping for a high-profile deal.

However, Thoma Bravo’s other senior partners are concerned that jumping to bed with Musk – who has posted a slew of sometimes bizarre tweets about his plans on Twitter, including that he plans to turn his San Francisco headquarters into a homeless shelter – may be Disaster .

“My sense is that Orlando Bravo wanted to do it but one or two of his senior partners didn’t,” a second source said.

Musk and Thomas Bravo declined to comment.

A source said other major buyouts, including Stephen Schwarzman’s Blackstone and billionaire Robert F Smith’s Vista Equity Partners, have rejected Musk outright. From now on, Apollo Global Management is only interested in providing debt financing, according to sources close to the talks.

Blackstone declined to comment. Vista did not return calls.

According to the sources, Musk also ran into hurdles in raising debt to fund the deal. The sources said Morgan Stanley, Barclays and Bank of America committed to lend Twitter $13 billion to complete the acquisition. But a lending source said rival banks Citigroup, Credit Suisse and RBC have all decided not to participate.

Citigroup and Credit Suisse declined to comment. RBC did not return calls.

Thoma Bravo . logo
Thoma Bravo’s senior partners worry that jumping into bed with Musk could be a disaster.
Thoma Bravo

Citigroup, Credit Suisse and RBC may offer loans against Musk’s Tesla stock, known as a margin loan, which Musk said in a statement last month could amount to $12.5 billion. However, they are not willing to lend to Twitter itself because the interest in those new loans may be greater than Twitter’s current cash flow, the lenders said.

“It’s an insane amount of leveraged financing,” the lending source said.

The volatility between private equity investors and banks is putting pressure on Musk to raise money elsewhere. As reported by The Post, Musk is looking to limit his personal exposure to $15 billion, including $3.4 billion in stock he already owns, which equates to 9.2% of the company’s stock.

In addition to raising $10 billion in cash stock from co-investors who have backed his companies in the past, Musk has signaled his willingness to let a handful of Twitter’s existing shareholders — co-founder Jack Dorsey and Fidelity among them, according to Reuters. Transfer of more than $5 billion in equity to the company when it becomes private.

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