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USA | May 5, 2022

Musk expected to be temporary Twitter CEO after closing US$44-billion takeover – CNBC

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Elon Musk talks at the Automotive World News Congress at the Renaissance Center in Detroit, Michigan, January 13, 2015. (Photo: REUTERS/Rebecca Cook)

(Reuters)

Elon Musk is expected to become Twitter’s temporary CEO after closing his US$44 billion takeover of the social-media firm, CNBC reported on Thursday (May 5), as the billionaire inches closer to securing funds for the deal.

Musk, the world’s richest man, is also the CEO at Tesla Inc and heads two other ventures, The Boring Company and SpaceX.

Tesla shares dropped 2.7 per cent indicating that investors were concerned about his increased involvement in Twitter.

Twitter shares extended gains and were up about four per cent at $50.89, but were still shy of Musk’s offer of $54.20.

Elon Musk’s twitter account is seen on a smartphone in front of the Twitter logo in this photo illustration taken, April 15, 2022. (Photo: REUTERS/Dado Ruvic/Illustration)

Reuters reported last week that Musk had lined up a person for the top job at Twitter.

Parag Agrawal, who was named Twitter’s CEO in November, is expected to remain in his role until the sale of the company to Musk is completed.

Earlier on Thursday, Musk listed a group of high-profile investors who are ready to provide funding of US$7.14 billion for his Twitter bid, including Oracle’s co-founder Larry Ellison and Sequoia Capital.

Saudi Arabian investor Prince Alwaleed bin Talal, who had initially opposed the buyout, also agreed to roll his US$1.89-billion stake into the deal rather than cashing out, a regulatory filing showed.

“Great to connect with you my “new” friend @elonmusk … Kingdom Holding Company and I look forward to roll our ~$1.9 bn in the “new” Twitter,” Alwaleed said in tweet.

People holding mobile phones are silhouetted against a backdrop projected with the Twitter logo in this illustration picture taken September 27, 2013. (Photo: REUTERS/Kacper Pempel/Illustration/File)

Musk increased his financing commitment to US$27.25 billion, while reducing a margin loan from Morgan Stanley to US$6.25 billion. He has already secured commitments for US$13 billion in loans against Twitter from banks.

The other investors include crypto firm Binance, New York-based real estate tycoon Steven Witkoff’s firm and DFJ Growth IV Partners, which has investments in the Boring Company, SpaceX, SolarCity and Tesla.

“We hope to be able to play a role in bringing social media and web together and broadening the use and adoption of crypto and blockchain technology,” Binance CEO Changpeng Zhao said.

Reuters reported last week Musk was in talks with large investment firms and high-net-worth individuals about taking on more financing for his Twitter acquisition and tying up less of his wealth in the deal.

Tesla CEO Elon Musk gestures as he visits the construction site of Tesla’s Gigafactory in Gruenheide near Berlin, Germany, August 13, 2021. (Photo: Patrick Pleul/Pool via Reuters)

Musk will continue to hold talks with existing shareholders of Twitter, including the company’s former chief Jack Dorsey, to contribute shares to the proposed acquisition, according to the filing.

Larry Ellison, a board member at Tesla and a self-described close friend of Musk has committed US$1 billion for the funding.

Musk, a self-proclaimed free speech absolutist who has advocated user-friendly tweaks to Twitter, such as an edit button and defeating “spam bots” that send overwhelming amounts of unwanted tweets, has previously said he would try to keep as many investors in Twitter as possible.

Investors have been fretting over whether Musk will complete the Twitter deal.

In April, he decided at the last minute not to take up a seat on Twitter’s board. In 2018, Musk tweeted that there was “funding secured” for a US$72-billion deal to take Tesla private but did not move ahead with an offer.

Musk would have to pay a US$1-billion termination fee to Twitter if he walked away, and the social media company could also sue him to complete the deal.

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