Buyout giants rule out backing Musk bid as takeover interest heats up
A host of buyout giants have ruled themselves out of backing Elon Musk’s hostile takeover of twitter over concerns the tech giant cannot boost its profitability, according to reports.
Blackstone Group, Vista Equity Partners and Brookfield Asset Management are among the big name buyout firms who have decided against lending their financial heft to Musk’s bid, the Financial Times reported.
Musk has launched a $43bn takeover for the firm which will require over $20bn of cash to succeed, with the remainder made up from debt and investors swapping their publicly traded shares for a stake in Musk’s private company.
It comes as private equity interest in the Twitter takeover has heated up in recent days, with Apollo Global reportedly exploring working with Musk and other backers on a deal.
However, sources close to Apollo told the Wall Street Journal that the firm is interested in providing debt or preferred equity to finance the deal, rather than equity.
Tech-focused private equity giant Thoma Bravo has also reportedly contacted Twitter to explore a standalone takeover to rival Musk’s, while lenders are also jostling for position to explore providing debt financing for the deal.
Bank of America, Deutsche Bank and Royal Bank of Canada are among the top lenders reportedly exploring participating in the deal, but concerns have been raised by potential backers that Twitter does not generate the quantities of cash required to service a debt-laden takeover.