Tesla and Twitter reportedly discussed a price cut to the original $44 billion buyout deal through their representatives, but the talks were unsuccessful.
Elon Musk’s representatives contacted Twitter and sought a 30% discount on the agreed price of $54.20 per share. Twitter dismissed such a request and Musk ultimately gave in and committed to completing the deal at the original price. Both parties agreed to delay Musk’s deposition.
Some sides previously involved in the deal, such as Apollo Global Management, Inc. and Sixth Street Partners reportedly backed out of the deal months ago.
Musk may have to sell more Tesla stock to meet the financing requirements for the Twitter deal and relying on equity financing from large investors, while banks have pledged $12.5 billion in debt financing.
The banks involved are Morgan Stanley, Bank of America and Barclays. Mitsubishi UFJ Financial Group, BNP Paribas, Mizuho Financial Group and Societe Generale are also part of the syndicate.
However, for the banks that provided most of the funding for the deal, they could face heavy losses as investors have lost interest in riskier bonds amid surging interest rates, heightened recession fears and market volatility triggered by geopolitical conditions.
Musk has previously sold $15.4 billion worth of shares of the electric vehicle (EV) Tesla, Inc.
Musk later tweeted: "the acquisition of Twitter is the catalyst for the creation of universal application X." Musk said he wants Twitter to be more like TikTok and Wechat, with more engaged users.
Shares of Tesla closed 3.48% lower to $240.81 and Twitter stock is down 1.35% to $51.30 yesterday.
Tesla has a 52-week high of $414.50 and a 52-week low of $206.86.
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