Twitter takeover: Elon Musk secures his own billion dollar break clause
Despite sending shockwaves across the business world, Elon Musk could walkaway from his $44bn Twitter takeover for just $1bn.
According to a regulatory filing by Twitter on Tuesday, limited damages could be brought by the social media firm if the eccentric billionaire failed to provide the equity financing needed for the deal to go through.
It is understood that Musk is part-funding the deal with $21bn of his own equity and a $12.5bn loan secured against his Tesla stake.
As it stands, Musk has not revealed how he will raise the equity needed, but continues to flood his Twitter feed with free speech declarations.
Normally private equity firms would be required to pay around six to seven per cent of the deal value if they were unable to fork out the necessary funds when push comes to shove. Meanwhile, the world’s richest man’s agreement with Twitter sits at 2.27 per cent of the total deal value.
So whilst Musk seems set on making Twitter a free speech haven and reinventing the wheel, the stakes for the SpaceX founder could be much lower than first anticipated.