Elon Musk ensures he’ll never get Twitter-banned

One thing to start with: Norway’s sovereign wealth fund worth $ 1.3 billion eyebrow Calls for a special audit of Credit Suisse and warned that it will not absolve executives and board members of the charge due to multiple scandals, as pressure is mounting on the Swiss lender to renovate its senior management.

Welcome to Due Diligence, your briefing on transaction execution, private equity and corporate financing. This article is an on-site version of the newsletter. Sign up Here To receive the newsletter we will send it to your inbox every Tuesday to Friday. Contact us at any time:

Elon Musk shoots a $ 44 billion bird

Last week took the richest man in the world Twitter To warn that “the barbarians at the gate” hint at a 1989 story KKRThe takeover of RJR Nevisco For $ 25 billion.

Elon MuskThe much larger $ 44 billion deal to buy Twitter stands in stark contrast to the KKR deal that has long been considered the founding leveraged buyout.

Unlike in RJR, where Henry Krabis and George Roberts Spending months formulating debt financing to cover a growing purchase price, the South African billionaire marked one of the largest leveraged buyouts in history with his first – and last – offer in 11 days.

On Monday, Elon Musk Signed its victory over the San Francisco-based technology company without raising its offer beyond $ 54.20 per share, or a $ 44 billion purchase price. It puts control of the social media platform in the hands of one of its most avid users – and overt critics.

Shareholders pushed Twitter to accept Elon Musk’s fully funded offer © AFP via Getty Images

Twitter initially asked to work with Musk after he Revealed a passive gamble At the company on April 4, and offered to add him to its board of directors. Musk agreed, then backed away.

Then 10 days later, he presented his takeover bid. Twitter implemented protection against poison pills, but was forced to the negotiating table after Musk put together a $ 46.5 billion financing package last Wednesday.

This weekend the pressure on the Twitter board, led by him, increased Sales force Co-CEO Brett TaylorWhen shareholders pushed the company to accept his offer with full Musk funding, people updated on the matter Told FT.

Critical was Musk’s willingness to put a significant portion of its net worth out of hand. The Tesla CEO raised $ 25.5 billion in debt – including a $ 12.5 billion interval loan against his car maker – and pledged $ 21 billion in financing for the takeover. That leaves him on the hook for more than 70 percent of the purchase price, unless Yes he finds other supporters.

The $ 33.5 billion that Musk puts on the table is 15 times greater than the cash KKR has raised to win the RJR.

Elon Musk's Twitter proposal is being formulated; How the billionaire will finance the takeover ($ 1 billion)

The billionaire is in talks with a number of wealthy people and institutional investors regarding backing up this part of his proposal, people told DD were briefed on the negotiations. Musk can bring a private equity company like Thomas BravoOr rich investors in his network, lowering his cash costs.

Or he can just swallow Twitter in its entirety.

Bankers who fund Musk were willing to lend him billions knowing he expects more money than they and his shares in Tesla are worth about 10 times the money he owes to Twitter.

“There is $ 30 billion of capital plus or minus below us,” said one banker. “We’re going to get our money back.”

Musk, the “Absolute Freedom Absolutist” himself, supported his proposal to change Twitter’s content management policy. But this is an expensive position to take, like Lex points out.

What is certain is that his impending rule will herald another era of change for Twitter employees.

Musk’s freedom of expression campaign comes later The dismissal Of a former CEO, co-founder Jack DorseyIssued by Elliott Management. The activist complained that Dorsey was too distracted from his other job at running a payment company square, And dealing with cryptocurrencies.

Now, Twitter will fall under the control of probably the only person in the world busier than its previous boss.

Blackstone proposes to be King of the Rites

“In the short term”, Benjamin GrahamThe key to value investing, once said, “The market is a voting machine. In the long run, it’s a weighing machine.”

However, a growing group of investors do not want the liquidation value of their holdings to be determined by bustling market machines. Instead, they are happy to rely on the judgment of the increasingly powerful private equity firms on Wall Street.

This surprising trend has driven the sequel to the recent real estate deals of Blackstone, Antoine Gare and Mark Vandwalda of DD. Report.

Jonathan Gray during a TV interview

Blackstone President Jonathan Gray told DD that the value of exchange-traded real estate investment funds “does not necessarily reflect what is happening in real estate” © Bloomberg

Of Steven Schwartzman A company, which famously did killing by taking Hilton Hotels Private Just before the financial crisis erupted in 2007, today the focus is on another type of take-private: buying a line of tax-favored vehicles known as “real estate investment trusts.”

Reeds, as they are commonly known, are required by law to pay most of their income annually in distribution. In return, they are exempt from paying corporation taxes.

Wrights are often traded on the stock exchange, where their stock prices have recently picked up the level as investors fear a rise in interest rates and the effect of a possible recession.

So Blackstone pounced and bought at least five public reeds since the plague began. Just yesterday the group agreed to buy PS Business parks For $ 7.6 billion.

Many of these transactions were funded by Blackstone’s own company, called WidthWhich has raised $ 63 billion since its launch in 2017.

But here’s the twist: Bright is not traded on the stock exchange. This means that no shares are traded continuously and there is no volatile share price. It also means that investors have fewer ways to redeem, although they can usually sell their shares back to the fund at fair value during a monthly window.

Bright’s rapid growth indicates how wealthy savers prefer to sacrifice liquidity to reassure the stability of their investments.

This reflects the preference of some large pension funds, which are so reluctant to show volatility in their accounts that they have adopted the unconventional economic idea of ​​payment “Liquidity premium”.

The American struggle of a French cable billionaire

DD readers will recognize Patrick DrahyThe French-Israeli cable billionaire who built his empire with aggressive debt-driven deals, and took part in Britain’s former telecom monopoly BT.

We dive into his adventures in America – where things look bad.

Shares in Altis USAThat it parted ways with its heavily indebted European mother in 2017, slumping at less than half its issue price – leaving Drahi, who owns 48 percent, with paper losses of more than $ 4 billion.

The company has cut costs and looked for buying opportunities, but has not been able to invest enough in its network and service, which has caused customers to come out en masse, according to analysts FT members Anna Gross and Harriet Agnew were told.

Drahi’s American Dream was difficult from the beginning. Back in 2015 he tried to buy Time Warner cableBut the owners – afraid of Altis’ games to cut costs – Ran into the arms Of a rival Communications Charter. Instead, it bought two sub-scale regional telecom companies, Suddenlink communication and Cablevision.

“Everyone in the industry cursed Altis, they saw the film in Europe,” he said Craig Muft B- Muft Nathanson.

Altice USA hopes that building fiber will be enough to change its fortune. Most rivals are upgrading their copper nets, but Altice is flooding its net with advanced fibers.

Investors think that in the shorter term their value may come from making trades. They are considering the likelihood that Derhi will buy shares cheaply and transfer the company to a private individual, or an opponent like Charter or Comcast Attaches it.

Unless you believe one of the two will happen, one investor said, “I have a hard time seeing why you will own it over the next 12-24 months.”

Job moves

Julie Gao

Julie Gao © Skadden

  • Tic Tac owner ByteDance Appointed Julie GaoFormer Senior Partner b Skaden In Hong Kong, as its new CFO, according to an internal memo sent by the company’s CEO Liang Robo Seen by DD.

  • Bank of America Appointed Bob Douglas, Deutsche BankFormer Head of Consumer and Retail Investment Banking in Europe, the Middle East and Africa, and Internal Employment Luke McMullen As co-heads of Emea’s Consumer Investment Banking and Retail. They replace Gianti in JaffaWho will become chairman of the unit.

  • Infrastructure investment company Stonepeak Appointed Macquarie CapitalFormer Global Joint Head of Daniel Wong As Senior Executive Director and Head of Europe, based in London.

  • Royal Bank of Canada wage Bank of America Rajat Bias As a manager in the banking banking investment sector, according to Bloomberg.

Smart reading

The opportunity cost Binance, the world’s largest crypto exchange, has carefully built ties with a Kremlin – linked agency to take advantage of the market of Russia that once ignited before its invasion of Ukraine. Reuters investigation reveals. She remained active in Russia after many of her rivals fled.

Under the deck A captain who navigates the mega-yachts of Russian oligarchs talks to the Guardian about the winding ownership structures of the ships and Prostitution, sexism and drug use In the yacht world.

Subscription canceled Netflix’s troubles could be the beginning of a “Great cancellation” Because rising inflation is leading consumers to turn their backs on the subscription economy, the FT reports.

News summary

Norway’s Wealth Fund supports calls for special audit of Credit Suisse hit by scandal (FT)

Vodafone investors are demanding that the telecom group speed up the execution of transactions (FT)

An activist calls on investors to come out against the board of Just Eat Takeaway (FT)

Venom supports two contenders for Abramovich’s Chelsea (FT)

Publisher of Assassin’s Creed Ubisoft attracts interest in acquisition (Bloomberg)

Elliott’s investment in a tour group is a rare bright spot for Spacs (FT)

A Gates-backed company accused of firing on whistleblowers who signaled misconduct (FT)

KPMG wins UK government contracts despite returning from tackle after scandals (FT)

Rupert Murdoch returns to British television while newspapers in the UK look beyond print (FT)

UK competition regulator investigates Marsk-Noble £ 2.6 billion marine drilling merger (FT)

Private equity: The maturing sector is increasingly adding shadow leverage (Lex)

Scoreboard – News and key analysis behind the business decisions in sports. Sign up Here

Lex’s newsletter – Updated with a letter from Lex centers around the world every Wednesday, and a review of the best interpretation of the week every Friday. Sign up Here

Elon Musk ensures he’ll never get Twitter-banned Source link Elon Musk ensures he’ll never get Twitter-banned

Related Articles

Back to top button