We just found out how Elon Musk may finance his $43B Twitter bid

In an SEC filing today, Musk indicated that he isexploring whether to commence a tender offer to acquire all of the outstanding shares of the company.

The filing shows how Musk plans to pay for the micro-blogging site. His offer is worth $54.20 per share in cash, making it worth around $43.4 billion. Musk's bid is a premium to the current value of the company, but it's not as high as the stock market's high of $73.34 per share.

Where will the money come from? It turns out that there are three major buckets.

• The first tranche, per the filing, comes from Morgan Stanley and “certain other financial institutions” that have “committed to provide $13 billion in financing” to Musk in the form of a $6.5 billion “senior secured term loan facility,” a $500 million “senior secured revolving facility,” a $3 billion “senior secured bridge loan facility,” and a $3 billion “senior unsecured bridge loan facility.”
• The second bucket of cash comes from, once again, Morgan Stanley and others who have “committed to provide $12.5 billion in margin loans” to Musk, against what we presume are his shares in Tesla and other companies.
• And, third, an “equity commitment letter” from Musk to “provide equity financing for the Proposed Transaction or the Potential Offer sufficient to pay all amounts payable in connection with the Offer and the Merger” net of the above funding sources. The total value of this equity commitment from Musk is “expected to be approximately $21 billion,” the filing states.

Musk intends to pay $21 billion from his own holdings and borrow around $13 billion in various fashions. It's a bit complicated, but Musk's bid is hardly small, so the path to collecting the needed cash in one pile is understandably convoluted.

The funding secured note is not an indication that the deal is a slam-dunk. There can be no assurance that a definitive agreement with respect to the Proposed Transaction will be executed or, if executed, whether the Proposed Transaction will be completed.

More to come, in other words, but Musk does appear to have a way to make his bid more than just words.

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