Elon Musk is in talks with large investment firms and high net-worth individuals about taking on more financing for his $44 billion acquisition of Twitter Inc TWTR.N and tying up less of his wealth in the deal, people familiar with the matter told Reuters.
The banks that agreed last month to provide $13 billion in loans secured against Twitter balked at providing more debt for Musk's acquisition given the San Francisco-based company's limited cash flow, Reuters reported last month. Musk committed to providing $21 billion in cash for the deal.
The CEO of Tesla Inc. could use the new financing to reduce his contribution to the equity check for the deal, the sources said.
Musk has also pledged some of his Tesla shares to banks to arrange a $12.5 billion margin loan to help fund the deal. He may seek to trim the size of the margin loan based on the new investor interest in the deal financing, one of the sources said.
Major investors such as private equity firms, hedge funds and high net-worth individuals, are in talks with Musk about providing preferred equity financing for the acquisition, the sources said. Preferred equity would pay a fixed dividend from Twitter, in the same way that a bond or a loan pays regular interest, but would appreciate in line with the equity value of the company.