NEW YORK: Apollo Global Management Inc and Sixth Street Partners, which had been looking to provide financing for Elon Musk’s proposed $44 billion buyout of Twitter Inc, are no longer in talks with the billionaire entrepreneur, said two sources familiar with the matter.
Apollo had been in talks to provide preferred equity financing for the deal, alongside Sixth Street, sources previously said. Apollo, Sixth Street and other investors were looking to commit more than $1 billion in financing for the deal at the time.
In reply to tweets saying that neither entities were part of the $7.1 billion of third-party equity financing announced in early May, nor part of the debt financing, Musk said: “correct”.
These talks ended months ago around the time Musk started having second thoughts about the deal, the sources cited above said. Musk initially proposed the buyout in April before backtracking in July and then changing course again this week.
Musk and Twitter are attempting to reach an agreement after months of litigation that damaged Twitter’s brand and fed Musk’s reputation for erratic behaviour.
Twitter and Musk did not immediately respond to requests for comment. Apollo and Sixth Street declined to comment.
Musk’s U-turn on buying Twitter could not have come at a worse time for the banks funding a large portion of the $44 billion deal and they could face significant losses because of an unfavourable financing environment, Reuters reported on Tuesday.
Musk is expected to provide much of the $44 billion through funds he raised by selling down his stake in electric vehicle maker Tesla Inc and by leaning on equity financing from large investors while major banks have committed to provide $12.5 billion of debt financing. — Reuters
