Elon Musk is in talks with private-equity firm Thoma Bravo about partnering on a possible takeover bid for Twitter, two sources close to the situation said.
Thoma Bravo, a Chicago-based buyout firm that’s focused on the technology sector, could be the key to Musk moving forward with a binding offer for Twitter
sources said. That’s mainly because Musk — despite the fact he’s the richest person in the world, with an estimated net worth of $270 billion, according to Forbes — doesn’t want to foot the entire bill for the acquisition, the sources added.
“What it would take Musk to raise the equity — like selling his Tesla shares — is something he probably doesn’t want to do,” one source briefed on the situation told The Post.
For similar reasons, Thoma Bravo — a major name in private equity whose past investments have include software security giant McAfee — would likely move forward on a Twitter buyout with Musk or not at all, the sources said.
Nevertheless, Thoma Bravo executives are mixed on the idea — mainly because of Musk’s erratic behavior and taste for controversial politics, according to the sources.
The Post broke the news last week that Thoma Bravo, like Musk, was interested in buying Twitter. Now, Thoma Bravo would likely only move forward with Musk, or not at all, sources said.
Musk announced Thursday morning he has lined up $21 billion in cash equity from himself and other co-investors to make a $46.5 billion bid for Twitter. Musk said he also has arranged $25.5 billion of committed debt financing through Morgan Stanley in the form of loans against Twitter itself and his personal stock.
With his Thursday filing, Musk could be signaling to Thoma Bravo it has committed financing in order to convince it to join forces and make what would be a binding proposal, insiders speculated on Thursday.
A source close to the situation said Musk has had little difficulty getting interest from co-investors that have participated in funding rounds for his other ventures including Space X. Nevertheless, Musk didn’t name any of his co-investors in the Thursday filing, and that has trained insiders’ focus on Thoma Bravo.
“Thoma is important to Musk,” a source said.
Meanwhile, executives at Thoma Bravo “see an opportunity to take out a ton of costs,” a source said, explaining why the firm remains interested in Twitter.
Still, Thoma Bravo would likely only buy Twitter on a friendly basis and is not comfortable with the hostile tender offer Musk threatened again in the Thursday SEC filing, the source said. Meanwhile, Musk in a tweet last week quoted the 1956 Elvis Presley hit “Love Me Tender,” and another this week that referenced F. Scott Fitzgerald’s novel “Tender Is the Night.”
While Musk has signaled the possibility of a hostile tender offer, sources note that such a move would still require a negotiation with the board, which has enacted a so-called “poison pill” that prevents him from acquiring more than 15% of its stock.
Still, absent talks with the board, Musk
could still launch a tender offer conditioned on Twitter removing the poison pill — a move that could enable him to gather shareholder support and pressure Twitter without triggering the pill.
As reported exclusively by The Post this week, Musk wants to spend $10 billion to $15 billion on buying Twitter, and needs partners to make up the rest of the $21 billion he said in the Thursday filing would be used in equity financing to buy Twitter.
So far, Twitter has neither accepted nor rejected Musk’s offer.
A Twitter spokesman on Thursday said, “We are in receipt of the updated, non-binding proposal from Elon Musk, which provides additional information regarding the original proposal and new information on potential financing. As previously announced and communicated to Mr. Musk directly, the Board is committed to conducting a careful, comprehensive and deliberate review to determine the course of action that it believes is in the best interest of the company and all Twitter stockholders.”