By Senad Karaahmetovic
Elon Musk’s new preferred equity financing for the $44 billion buyout of Twitter (NYSE:TWTR) has been put on hold as the uncertainty around the deal grows, according to Reuters.
Earlier this week, Musk’s lawyers sent a letter to Twitter warning the billionaire may abandon the deal if the social media company fails to provide the requested data on bot accounts.
Musk is obliged to pay $33.5 billion in cash to finance the transaction and has secured additional debt financing to cover the remaining amount. This is because the majority of Musk’s wealth lies in Tesla (NASDAQ:TSLA) stock, making his liquidity limited.
The Tesla boss has been negotiating with a group of private equity firms managed by Apollo Global Management (NYSE:APO) to secure an additional preferred equity financing of $2 billion to $3 billion to reduce his cash contribution for the Twitter deal. Given the recent uncertainty surrounding the acquisition, this funding has now been put on ice until there is more clarity.
Suspending the financing activities indicates that Musk’s warnings are impeding the development of the deal, though Twitter has argued that Musk has been responsibly fulfilling his contract obligations.