Elon Musk on Monday pledged to close the acquisition of Twitter Inc by Friday in a videoconference call with bankers helping to fund the deal, people with knowledge of the matter said.
The banks, which are providing US$13 billion of debt financing, have finished putting together the final credit agreement and are in the process of signing the documentation, one of the last steps before actually sending the cash to Musk, said the people, who asked not to be named discussing a private transaction.
These latest developments suggest Musk is in the final stages of closing the transaction by Friday, the deadline set by a court.
Photo: Reuters
Twitter shares jumped on the news and rose as high as US$53.18, approaching Musk’s US$54.20 acquisition price. Twitter’s total purchase price is US$44 billion.
The banks, led by Morgan Stanley, were expected to receive one of the last formalities — a borrowing notice — on Tuesday, and the cash is expected to be held in escrow today, the people said.
On the call, Musk also promised to help the banks market the debt to money managers after the deal closes, the people said.
That is key for the group of seven banks, which have been left in a lurch after Musk’s sudden reversal to go through with buying Twitter early this month.
Normally, the banks would offload debt commitments to money managers in the form of junk bonds and leveraged loans before a deal closes, but the compressed timeline and a global deterioration of credit conditions have forced them to keep the debt on their books.
Banks are facing paper losses of about US$500 million on the transaction — pain that would be realized once the debt is sold to institutional investors.
The average cost of borrowing spiked this year along with accelerating inflation, recession fears and geopolitical turmoil, well above the 11.75 percent maximum interest rate that the banks promised Musk on the riskiest tranche of the debt, leaving them on the hook for the difference.
Triple-C rated junk bonds are trading at about 15.8 percent on average, according to Bloomberg index data.
POWERING UP: PSUs for AI servers made up about 50% of Delta’s total server PSU revenue during the first three quarters of last year, the company said Power supply and electronic components maker Delta Electronics Inc (台達電) reported record-high revenue of NT$161.61 billion (US$5.11 billion) for last quarter and said it remains positive about this quarter. Last quarter’s figure was up 7.6 percent from the previous quarter and 41.51 percent higher than a year earlier, and largely in line with Yuanta Securities Investment Consulting Co’s (元大投顧) forecast of NT$160 billion. Delta’s annual revenue last year rose 31.76 percent year-on-year to NT$554.89 billion, also a record high for the company. Its strong performance reflected continued demand for high-performance power solutions and advanced liquid-cooling products used in artificial intelligence (AI) data centers,
SIZE MATTERS: TSMC started phasing out 8-inch wafer production last year, while Samsung is more aggressively retiring 8-inch capacity, TrendForce said Chipmakers are expected to raise prices of 8-inch wafers by up to 20 percent this year on concern over supply constraints as major contract chipmakers Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co gradually retire less advanced wafer capacity, TrendForce Corp (集邦科技) said yesterday. It is the first significant across-the-board price hike since a global semiconductor correction in 2023, the Taipei-based market researcher said in a report. Global 8-inch wafer capacity slid 0.3 percent year-on-year last year, although 8-inch wafer prices still hovered at relatively stable levels throughout the year, TrendForce said. The downward trend is expected to continue this year,
A proposed billionaires’ tax in California has ignited a political uproar in Silicon Valley, with tech titans threatening to leave the state while California Governor Gavin Newsom of the Democratic Party maneuvers to defeat a levy that he fears would lead to an exodus of wealth. A technology mecca, California has more billionaires than any other US state — a few hundred, by some estimates. About half its personal income tax revenue, a financial backbone in the nearly US$350 billion budget, comes from the top 1 percent of earners. A large healthcare union is attempting to place a proposal before
Vincent Wei led fellow Singaporean farmers around an empty Malaysian plot, laying out plans for a greenhouse and rows of leafy vegetables. What he pitched was not just space for crops, but a lifeline for growers struggling to make ends meet in a city-state with high prices and little vacant land. The future agriculture hub is part of a joint special economic zone launched last year by the two neighbors, expected to cost US$123 million and produce 10,000 tonnes of fresh produce annually. It is attracting Singaporean farmers with promises of cheaper land, labor and energy just over the border.
RSS